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entitled 'Navy Shipbuilding: Significant Investments in the Littoral
Combat Ship Continue Amid Substantial Unknowns about Capabilities,
Use, and Cost' which was released on July 25, 2013.
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United States Government Accountability Office:
GAO:
Report to Congressional Requesters:
July 2013:
Navy Shipbuilding:
Significant Investments in the Littoral Combat Ship Continue Amid
Substantial Unknowns about Capabilities, Use, and Cost:
GAO-13-530:
GAO Highlights:
Highlights of GAO-13-530, a report to congressional requesters.
Why GAO Did This Study:
The Navy’s LCS consists of the ship—-called a seaframe—-and the
mission modules, which, when integrated with the seaframe, provide
mission capability. LCS is intended to be configured to perform three
primary missions: surface warfare; mine countermeasures; and anti-
submarine warfare. The Navy currently plans to buy 52 seaframes,
including two variants constructed by different shipbuilders, and 64
mission modules. The total estimated acquisition cost for the program
is approximately $40 billion in 2010 dollars. GAO has previously
reported on a number of challenges related to the LCS program,
including cost growth, schedule delays, and problems with delivering
intended capabilities.
GAO was asked to assess the status of the LCS program. GAO assessed
(1) the progress and challenges associated with seaframe and mission
module production, development, and testing; and (2) the soundness of
the Navy’s business case for the integrated LCS program. GAO analyzed
Navy and contractor documents, toured shipyards and LCS ships, and
interviewed DOD and Navy officials and contractor representatives.
What GAO Found:
The Littoral Combat Ship (LCS) seaframe program continues to face
challenges stemming from concurrent design, production, and testing
activities. The Navy has taken steps to resolve problems with the lead
ships, and the shipyards are beginning to realize benefits from
facility improvements and experience. However, testing remains to be
completed and the Navy is currently studying potentially significant
design changes, such as increasing the commonality of systems between
the two ship variants and changing ship capabilities. Changes at this
point can compromise the positive impacts of shipyard learning,
increase costs, and prolong schedules. The mission module program also
has concurrency issues, and testing to date has shown considerable
limitations in capabilities. The Navy is pursuing an incremental
approach to developing and fielding mission module capabilities, but
it has yet to finalize the requirements for each increment and does
not plan to achieve the minimum performance requirements for the mine
and surface warfare modules until final module increments are fielded
in 2017 and 2019, respectively.
The Navy continues to buy LCS seaframes and modules even as
significant questions remain about the program and its underlying
business case. Elements of the LCS business case, including its cost,
the time needed to develop and field the system, and its anticipated
capabilities have degraded over time. There are also significant
unknowns related to key LCS operations and support concepts and the
relative advantages and disadvantages of the two seaframe variants.
The potential effect of these unknowns on the program is compounded by
the Navy’s aggressive acquisition strategy. By the time key tests of
integrated LCS capability are completed in several years, the Navy
will have procured or put under contract more than half of the planned
number of seaframes. Almost half of the planned seaframes are already
under contract, and the Navy plans to award further contracts in 2016,
before the Department of Defense (DOD) makes a decision about full
rate production of the ships. The Navy will not be able to demonstrate
that mission modules integrated with the seaframes can meet the
minimum performance requirements until operational testing for both
variants (Freedom and Independence) is completed, currently planned
for 2019.
Figure: LCS contract and Testing Activities:
[Refer to PDF for image: timeline]
Cumulative seaframe purchases (includes both funded and planned:
FY 2012: 12;
FY 2013: 16;
FY 2014: 20;
FY 2015: 24; (Solicit proposals and source selection);
FY 2016: 26 (Contract award);
FY 2017: 28;
FY 2018: 30;
FY 2019: 33 (Full-rate production decision).
FY 2014-FY 2019: Freedom variant operational testing;
FY 2015-FY 2019: Independence variant operational testing.
Source: GAO analysis of Navy data.
[End of figure]
The Navy has also essentially bypassed two major acquisition reviews
for mission modules, purchasing 8 of the 64 planned modules before
gaining approval to enter the system design and demonstration and
initial production phases.
What GAO Recommends:
To ensure that continued LCS investment is informed by key
information, Congress should consider restricting funding for further
LCS ships until the Navy completes several ongoing studies. GAO is
also making several recommendations, including that DOD limit future
acquisitions until it completes a full rate production decision review
and the Navy definitively decides how the ship is to be used.
View [hyperlink, http://www.gao.gov/products/GAO-13-530]. For more
information, contact Michele Mackin at (202) 512-4841 or
mackinm@gao.gov.
[End of section]
Contents:
Letter:
Background:
Seaframe Quality and Cost Should Continue to Improve, but Delays
Persist and Potentially Significant Design Changes Could Disrupt
Production Efficiency:
Navy Acquisition of Mission Modules Is Risky Due to Inadequately
Defined Early Increments and Continued Developmental Difficulties:
Significant Questions Remain Regarding the LCS Business Case As the
Navy Commits to Producing More Ships and Modules:
Conclusions:
Matters for Congressional Consideration:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Comments from the Department of Defense:
Appendix III: Mission Package Overview Illustrations from Interactive
Figures:
Appendix IV: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Major Changes in Navy's Littoral Combat Ship (LCS)
Acquisition and Contracting Strategy:
Table 2: Status of Littoral Combat Ship (LCS) Seaframes:
Table 3: Delays in Fielding Littoral Combat Ship Mission Package
Increments:
Table 4: Evolution of Navy Statements about Littoral Combat Ship (LCS)
Capability:
Table 5: Major Littoral Combat Ship (LCS) Conceptual Questions
Regarding Ship Operations and Seaframe Variants:
Table 6: Potential Areas of Littoral Combat Ship (LCS) Operating and
Support Cost Uncertainty:
Table 7: Planned Seaframe Contract Activities, Mission Package
Procurement, and Operational Testing of Mission Package Increments on
Each Variant:
Figures:
Figure 1: Littoral Combat Ship (LCS) Seaframe Variants:
Figure 2: Major Design Changes among Littoral Combat Ship (LCS)
Seaframes:
Figure 3: Actual and Projected Pre-outfitting and Labor Hours for Two
Variants of the Littoral Combat Ship (LCS) Seaframe:
Figure 4: Number of Deficiencies Reported at Delivery for Early
Littoral Combat Ship Seaframes:
Figure 5: Littoral Combat Ship (LCS) Construction Timeframes:
Figure 6: Decrease in Littoral Combat Ship (LCS) Design Changes for
Both Seaframe Variants:
Figure 7: Navy's Progress Fielding Littoral Combat Ship (LCS) Mine
Countermeasures Mission Package Systems:
Figure 8: Navy's Progress Fielding Littoral Combat Ship (LCS) Surface
Warfare Mission Package Systems:
Figure 9: Navy's Progress Fielding Littoral Combat Ship (LCS) Anti-
Submarine Warfare Mission Package Systems:
Figure 10: Acquisition Frameworks for Typical Shipbuilding Programs
and Littoral Combat Ship:
Figure 11: Mine Countermeasures Package Overview:
Figure 12: Surface Warfare Package Overview:
Figure 13: Anti-Submarine Warfare Package Overview:
Abbreviations:
ASW: Anti-Submarine Warfare:
CONOPS: Concept of Operations:
DOD: Department of Defense:
DOT&E: Director, Operational Test and Evaluation:
INSURV: Board of Inspection and Survey:
LCS: Littoral Combat Ship:
MCM: Mine Countermeasures:
PSA: Post Shakedown Availability:
OPNAV: Office of the Chief of Naval Operations:
RMMV: Remote Multi-Mission Vehicle:
SUW: Surface Warfare:
USD (AT&L): Undersecretary of Defense for Acquisition, Technology and
Logistics:
[End of section]
GAO:
United States Government Accountability Office:
441 G St. N.W.
Washington, DC 20548:
July 22, 2013:
The Honorable Carl Levin:
Chairman:
Committee on Armed Services:
United States Senate:
The Honorable John McCain:
Ranking Member:
Subcommittee on Seapower:
Committee on Armed Services:
United States Senate:
The Honorable J. Randy Forbes:
Chairman:
The Honorable Mike McIntyre:
Ranking Member:
Subcommittee on Seapower and Projection Forces:
Committee on Armed Services:
House of Representatives:
The Navy's Littoral Combat Ship (LCS) is intended to be reconfigurable
to perform three different primary missions: mine countermeasures
(MCM), surface warfare (SUW), and anti-submarine warfare (ASW). The
LCS consists of two distinct parts--the ship itself (called a seaframe
because of its ability to carry interchangeable payloads similarly to
an airframe) and the interchangeable package of sensors and weapons
that it carries and deploys, called a mission package. The mission
package provides the majority of the ship's combat capability. Mission
packages are composed of one or more mission modules and an aviation
capability. The Navy has contracted for 24 seaframes, consisting of
two design variants being constructed at two U.S. shipyards. The Navy
has also procured 8 mission packages, with plans to procure 2 more in
2013. In its baselines, the Navy planned to spend over $40 billion in
2010 dollars through fiscal year 2034 to acquire 55 LCS seaframes and
64 mission packages--though it has since reduced the total number of
seaframes to 52.
The Navy has accepted delivery of the first three seaframes, and has
spent several years completing various test and maintenance events on
the first two--USS Freedom (LCS 1) and USS Independence (LCS 2); USS
Fort Worth (LCS 3) was delivered in June 2012. During this time, we
and others have identified a number of problems with the seaframes and
their equipment, as well as challenges related to the development of
mission module technologies. In light of these issues, you asked us to
conduct a broad evaluation of the LCS program. This report addresses
the following: (1) the Navy's progress in producing and testing LCS
seaframes and any remaining risks; (2) the Navy's progress in
developing, producing, and testing LCS mission modules and any
remaining risks; (3) any risks in the Navy's acquisition strategy for
the integrated LCS program.
To conduct our work, we evaluated the Navy's acquisition strategies;
requirements documentation; concepts of operations; test and delivery
schedules; test plans; and life-cycle cost estimates for the two
seaframe variants and the mission modules. In addition, we interviewed
the Under Secretary of Defense for Acquisition, Technology and
Logistics; the Director, Operational Test and Evaluation; Deputy
Directors for Cost Assessment and Program Evaluation; the Director of
Navy Staff; officials from the Office of the Chief of Naval Operations
(OPNAV, who represent the sponsors of the LCS program); LCS program
office officials; and officials from Fleet Forces Command, LCS
Squadron One, and the Third, Fourth, Fifth, and Seventh Fleets; among
others. We analyzed Navy and contractor documentation on the seaframes
and mission modules programs related to development, production,
testing, performance, and fielding. We discussed this information with
government and contractor representatives responsible for managing
these programs and testing key LCS mission systems. We also visited
both shipyards and toured the three LCS ships that have been delivered
to the Navy to date. A more detailed description of our scope and
methodology is presented in appendix I.
We conducted this performance audit from April 2012 to July 2013 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Background:
The concept for the LCS emerged in the late 1990s and early 2000s as
the Navy was trying to address two main needs. First, it had
identified existing and emerging capability gaps in its ability to
defeat large numbers of hostile small boats, sea mines, and quiet
diesel-electric and nuclear-powered submarines, especially when these
threats were present in the shallow waters close to shore, which are
known as the littorals. Second, the Navy wanted to field an affordable
utility ship that would be able to handle some of the day-to-day tasks
and responsibilities of the Navy, including missions such as counter-
piracy patrols and foreign nation training exercises that are
relatively low risk. As the number of frigates has declined over time,
these missions are increasingly being performed by more expensive and
capable ships--destroyers and cruisers--which the Navy states are in
high demand for more stressing operations. In addition, an affordable
ship class was needed if the Navy hoped to maintain its fleet size
while dealing with a tightening shipbuilding budget for new surface
combatants.
To fulfill these goals, the Navy settled on a set of novel concepts
that would be realized on a new class of ships--LCS. LCS would have
interchangeable mission systems in the form of mission modules rather
than fixed mission systems as is generally the case with other Navy
surface combatants. These modules would give the Navy flexibility to
change equipment in the field to meet different mission needs, and to
incorporate new technology to address emerging threats. LCS was also
envisioned as having a greatly reduced crew size compared to other
ship classes, which in turn would lead to lower costs for operations
and support. To balance these reduced manning levels with its
operational, maintenance, support, and administrative needs, the Navy
developed a new maintenance and support concept. Unlike other ships,
LCS would have no onboard administrative personnel and a limited
ability to conduct maintenance at sea; instead, it would rely heavily
on shore-based support. The Navy also opted to use a rotational
crewing concept, whereby multiple crews are assigned to one ship and
rotate on and off while the ship remains forward deployed. Rotational
crewing is used on the ballistic missile submarines, mine
countermeasures ships, and coastal patrol craft, but it is not widely
used on U.S. Navy surface combatants.
The Navy formally initiated the LCS acquisition program in 2004. At
that time, the LCS seaframe and mission modules acquisition efforts
were managed as one program. In 2011, the Navy requested that they be
separated into two programs managed by two distinct program offices,
which would fall under a newly formed Program Executive Office. The
LCS seaframe program office is responsible for the hull; various
command and control systems; core combat systems such as radars and
the 57-millimeter gun; and launch, handling, and recovery systems that
deploy mission module equipment. The mission modules program office is
responsible for buying and integrating the systems that come together
to form the three different mission packages--MCM, ASW, and SUW.
The Navy is procuring two different seaframe designs from shipbuilding
teams led by Lockheed Martin--which builds its ships at Marinette
Marine in Marinette, Wisconsin--and Austal USA in Mobile,
Alabama.[Footnote 1] The two designs reflect different contractor
solutions to the same set of performance requirements. The most
notable difference is that the Lockheed Martin Freedom variant (LCS 1
and other odd-numbered seaframes, 3 through 23) is a monohull design
with a steel hull and aluminum superstructure, while the Austal USA
Independence variant (LCS 2 and other even-numbered seaframes, 4
through 24) is an aluminum trimaran.[Footnote 2] This report refers to
the Lockheed Martin ships as the Freedom variant and the Austal USA
ships as the Independence variant.
Figure 1 shows the first two LCS seaframes.
Figure 1: Littoral Combat Ship (LCS) Seaframe Variants:
[Refer to PDF for image: 2 photographs]
Freedom variant.
Source: Lockheed Martin (image).
Independence variant.
Source: General Dynamics (image).
[End of figure]
Each seaframe has reconfigurable spaces where the mission modules are
carried. These spaces are equipped with standardized connections for
ship services including power and cooling. The mission module designs
are based on standard shipping containers that are outfitted with a
variety of unmanned systems, sensors, and weapons that can be loaded
onto and off of the seaframe. Mission modules are also accompanied by
an aviation detachment, consisting of a helicopter and its flight and
support crew, as well as vertical take-off unmanned aerial vehicles.
When the aviation detachment is embarked with a mission module and the
mission module crew, it is referred to as a mission package. The Navy
is fielding the mission packages in increments in order to deliver
capabilities faster. The Navy plans on fielding one ASW increment and
four MCM and SUW increments. The Navy will upgrade all mission
packages to the same configuration once the final increment of each
has been fielded. The Navy plans to buy 64 mission packages: 16 ASW
packages, 24 MCM packages, and 24 SUW packages.
The Navy's acquisition strategy for LCS seaframes has changed several
times over the past decade. The original plan was to fund one or two
initial ships--in what the Navy called a Flight 0 configuration--based
on the designs it selected through a conceptual design competition,
and then spend time experimenting with the seaframes and overall LCS
concept. This experimentation time was considered important to help
inform what the Navy wanted and needed in the seaframe, and also to
help determine if the LCS concept was feasible. Further, although both
designs met the Navy's requirements, their significant differences
lent even more importance to the experimentation concept to inform a
decision about which seaframe design was better suited to meet the
Navy's needs. After a down-select decision, the winning design was to
be procured in larger numbers, with any design changes incorporated
into a new Flight 1 configuration. The Navy abandoned this strategy,
however, after concluding it would be unrealistic to expect the two
competing shipyards to build only one or two ships and then wait for
the Navy to complete the period of experimentation before awarding
additional contracts. Instead, the Navy opted to continue funding
additional seaframes. This decision meant that the Navy would buy a
number of seaframes without having completed the planned period of
discovery and learning. The Navy has made several other revisions to
the LCS acquisition strategy over time, including shifting back and
forth between plans to down-select to one seaframe design or to build
both. Table 1 shows the evolution of the Navy's LCS acquisition
strategy, and relevant contracting actions.
Table 1: Major Changes in Navy's Littoral Combat Ship (LCS)
Acquisition and Contracting Strategy:
Date: Early concept--approx. 2000-2004; Acquisition strategy action:
[Check];
Contracting action: [Empty];
Description: Two shipyards would each build one Flight 0 prototype.
These prototypes would be tested by experimentation in the fleet,
which would inform design changes or a decision to down-select; that
is, to buy only one variant.
Date: December 2004 and October 2005;
Acquisition strategy action: [Empty];
Contracting action: [Check];
Description: Navy awards cost-reimbursable contracts for detailed
design and construction for LCS 1 and LCS 2, respectively. The Navy
paid for these ships with research and development funds.
Date: 2005;
Acquisition strategy action: [Check];
Contracting action: [Empty];
Description: The Navy decides to continue procurement of both Flight 0
seaframe designs at least through fiscal year 2009. Experimentation
will now occur concurrently with buying seaframes.
Date: June and December 2006[A];
Acquisition strategy action: [Empty];
Contracting action: [Check];
Description: Navy exercises contract options for construction of the
LCS 3 and LCS 4, respectively.
Date: April and November 2007;
Acquisition strategy action: [Empty];
Contracting action: [Check];
Description: After unsuccessful negotiations to change the contracts
for LCS 3 and 4 from cost-reimbursable type to fixed price incentive
contracts to manage excessive cost growth, the Navy terminates these
contracts.
Date: September 2008;
Acquisition strategy action: [Check];
Contracting action: [Empty];
Description: Navy decides to continue buying both variants with no
plans to down-select to a single ship design, and to incorporate
design changes and lessons learned into what it terms a Flight 0+
configuration.
Date: March and May 2009;
Acquisition strategy action: [Empty];
Contracting action: [Check];
Description: Navy awards fixed price contracts to both shipyards for
LCS 3 and 4.
Date: January 2010;
Acquisition strategy action: [Check];
Contracting action: [Empty];
Description: Navy approves plans for a down-select in fiscal year 2010
to a single design to be procured in a block buy of up to ten ships
over 5 years. This strategy is intended to obtain more competitive
pricing. The Navy plans for two ships in fiscal year 2010 and two more
ships per year from fiscal years 2011-2014.
Date: November 2010;
Acquisition strategy action: [Check];
Contracting action: [Empty];
Description: As a result of receiving competitive pricing from both
the shipbuilders during negotiations, the Navy decides to continue
buying both designs and award a ten-ship block buy contract to each
contractor. Navy requests and obtains congressional approval for this
change.
Date: December 2010;
Acquisition strategy action: [Empty];
Contracting action: [Check];
Description: Navy awards two block buy contracts for up to ten ships
to both shipyards; the Navy authorizes construction of one ship at
each shipyard at the time of contract award, and plans to authorize
construction of one ship at each shipyard in fiscal year 2011, and two
ships at each shipyard per year, from fiscal years 2012-2015.
Source: GAO analysis of Navy LCS acquisition strategies.
[A] From 2006-2008, 5 seaframes, including the original LCS 3 and LCS
4 which the Navy contracted for in June and December of 2006,
respectively, were canceled by the Navy as part of program
restructuring or congressional action. The actions canceling 3 of
these seaframes are not included above because they occurred prior to
a contract being awarded.
Source: GAO analysis of Navy LCS acquisition strategies.
[A] From 2006-2008, 5 seaframes, including the original LCS 3 and LCS
4 which the Navy contracted for in June and December of 2006,
respectively, were canceled by the Navy as a result of program
restructuring or congressional action. The actions canceling 3 of
these seaframes are not included above because they occurred prior to
a contract being awarded.
[End of table]
As indicated by table 2 below, the Navy has contracted for 24 LCS
seaframes to date. Under the block buy contracts it negotiated with
the two shipbuilders in November 2010, the Navy negotiated prices
upfront for the seaframes. However, the shipyards cannot proceed with
work in connection with the ships until the Navy provides written
notice that funds are available and have been obligated to the
contract.
Table 2: Status of Littoral Combat Ship (LCS) Seaframes:
Seaframe number: 1-3;
Status as of March 2013: Navy has accepted delivery.
Seaframe number: 4-10;
Status as of March 2013: Under construction at the two shipyards.
Seaframe number: 11-16;
Status as of March 2013: Under contract with the two shipyards;
congressional funding has been received.
Seaframe number: 17-24;
Status as of March 2013: Under contract but not yet congressionally
funded.
Source: Navy documentation.
[End of table]
The Navy requested funding for LCS 17-20 in its fiscal year 2014
budget request and plans to request funding for LCS 21-24 in its
fiscal year 2015 request. In any given fiscal year, if funds are not
available to fully fund the ships planned for that year, the shipyards
can renegotiate the prices and delivery schedules for those ships and
any additional ships covered by the block buy contracts that have not
yet started construction.[Footnote 3] However, the target prices for
the seaframes already funded and under construction would not be
affected and any remaining unfunded ships are not to be considered
terminated for the convenience of the government. According to the
Navy, the cost of the funded ships might still increase under this
scenario because of increases in the overhead costs applied to those
ships. The Navy and shipbuilders would share some of these costs and
the shipbuilders may have to absorb the remainder of these costs if
the increases cause the total seaframe construction cost to exceed the
ceiling price in the contract.[Footnote 4] The Navy expects to take
delivery of the last seaframes under these contracts in 2019. In 2013,
the Navy announced it was reducing the number of planned seaframe
purchases from 55 to 52, based on changing force structure
requirements.
In 2012, two independent Navy studies--one conducted by the Board of
Inspection and Survey (INSURV, the Navy's ship inspection entity) and
one conducted by the office of the Chief of Naval Operations--
identified concerns with the LCS and recommended steps to improve
aspects of the program.[Footnote 5] Partially in response, in August
2012, the Chief of Naval Operations established an LCS oversight
council. The council is composed of vice admirals from the
requirements, acquisition, and fleet communities, and has the mission
of ensuring "the successful procurement, development, manning,
training, sustainment, and operational employment" of the LCS, mission
packages, and shore infrastructure. The council's chairman carries the
authority of the Chief of Naval Operations, and its first task was to
develop a comprehensive plan to address the recommendations in the
independent studies and concepts of operations (CONOPS) and doctrine
issues needed to help support the planned April 2013 deployment of LCS
1 to Singapore. The first installment of the LCS Council's plan was
issued in January 2013 and the plan currently contains over 1,000
action items. In March 2013, the Chief of Naval Operations added the
Joint High Speed Vessel--also constructed at Austal USA--to the LCS
Council's purview, citing the unique challenges facing both classes.
[Footnote 6]
One major activity identified in the LCS Council's plan is for both
seaframe variants to complete testing to demonstrate their
performance. DOD acquisition policy requires defense acquisition
programs execute and complete developmental testing and operational
testing. Developmental testing is intended to assist in identifying
system performance, capabilities, limitations, and safety issues to
help reduce design and programmatic risks. Operational testing is
intended to assess a weapon system's capability in a realistic
environment when maintained and operated by warfighters, subjected to
routine wear-and-tear, and employed in combat conditions. Operational
testing also includes live-fire testing, which provides timely
assessment of the survivability and lethality of a weapon system.
Survivability tests are another type of test, which demonstrate that
the ship designs can safely absorb and control damage and includes a
full ship shock trial, where a manned ship is subjected to a
controlled, underwater explosion at sea. Statute requires a program to
complete realistic survivability tests and initial operational testing
before proceeding beyond low-rate initial production.[Footnote 7]
Prior to acceptance, ships are also typically required to go through
various trials to verify that requirements and specifications are met.
An acceptance trial is first conducted by INSURV to determine whether
the ship has been completed in accordance with the contract
specifications and is operationally ready. After further Navy tests
and evaluations, INSURV conducts a final contract trial to
operationally demonstrate that the ship's systems satisfy material
readiness conditions before the contract period ends and it is
delivered to the fleet. Following acceptance and before initial
deployment, the Navy also has the opportunity to make any needed
additional corrections or to fix any problems that may have emerged in
testing during a repair period called a post-shakedown availability
(PSA). LCS 1 has completed her trials and PSA; LCS 2 has completed one
PSA with a second one planned and has a remaining trial; LCS 3 has had
both trials and is now entering a PSA period.
Seaframe Quality and Cost Should Continue to Improve, but Delays
Persist and Potentially Significant Design Changes Could Disrupt
Production Efficiency:
The Navy has made progress in addressing some of the early design and
construction problems on LCS 1 and LCS 2, and is obtaining better cost
performance from the shipyards on follow-on seaframes now that the
seaframes are in steady production. However, schedule delays persist.
Based on projected shipyard learning curve improvements, shipyard
performance can be expected to continue to improve over time. But,
this expected progress may be disrupted because the Navy is
considering new, potentially significant seaframe design changes that
could disrupt production efficiency and learning. Neither variant has
yet completed developmental testing to validate its performance or
shock and survivability testing. Late discoveries in testing while
seaframes continue to be constructed could lead to further design
changes.
Navy Making Progress on Resolving Early Seaframe Quality Issues:
The Navy has made progress in addressing some of the design and
quality issues that have arisen on the lead ships--LCS 1 and LCS 2. We
have previously reported that both ships had outstanding technical
issues at the time of delivery, and the Navy has continued to discover
additional problems.[Footnote 8] For example, 17 cracks were
identified on LCS 1 following delivery and after a period of
operations; these had been predicted to occur by Navy and contractor
structural analyses. Of these 17 cracks, 16 were in the topside, or
deckhouse structure, and one was found in the hull. LCS 1 also has had
issues with the failure of one of its gas turbine engines, corrosion,
and a leaking seal on the propulsion shaft. LCS 2, which has spent
much less time operating and has traveled fewer miles than LCS 1, has
not reported as many major problems, but the ship has had corrosion in
its waterjet propulsion systems that has required additional money to
correct.
According to the Navy and both shipbuilders, a number of design
changes have been implemented on the lead ships and the follow-on
ships of each variant to address and correct some of these problems.
The Navy repaired the cracks on LCS 1 and implemented design changes
(reinforcing weak areas) on LCS 3 and follow-on ships in the Freedom
class to prevent the stresses that led to cracking. The Navy has also
made changes to the configuration of several major ship systems,
including structure, propulsion, communications, electrical, and
navigation systems, to correct other problems. To reduce corrosion on
both variants, the Navy expanded the corrosion protection system on
the Freedom-class variant and added new corrosion protection systems
to the waterjet propulsion systems of the Independence-class variant.
The Navy also made design changes to the mission module bay at the
stern of the Freedom variant to reduce corrosion and water build-up in
that space. In some instances, the Navy paid for these changes, while
the contractor paid in other instances.
Figure 2 identifies several of the significant design changes made to
follow-on ships of each variant as compared to prior ships.
Figure 2: Major Design Changes among Littoral Combat Ship (LCS)
Seaframes:
[Refer to PDF for image: 2 illustrated photographs]
Freedom variant:
LCS 1: Added stern ballast tanks;
LCS 3 and follow: Ship lengthened by 9 feet;
LCS 1 to 3: Added aviation storage;
LCS 1 to 3: Changed anchor windlass system;
LCS 3 to 5: Improved ramps and doors;
LCS 3 to 5: Changed waterjet propulsion systems.
Source: GAO analysis of Navy data; U.S. Navy (image).
Independence variant:
LCS 4 to 6: Changed waterjet propulsion systems;
LCS 4 to 6: Improved foam fire suppression system;
LCS 2 to 4: Added corrosion prevention system;
LCS 2 to 4: Improved watermist fire suppression system;
LCS 2 to 4: Improved bow and anchor systems.
Source: GAO analysis of Navy data; U.S. Navy (image).
[End of figure]
The Navy and the shipyards told us that they have also taken steps to
address weight growth, particularly on LCS 1, but seaframe weight
remains a top technical risk for the program. Weight affects the speed
and stability of the ship, as well as how much it can carry. According
to Navy officials, LCS 1 experienced weight growth because the Navy
directed design changes after the initial ship design phases were
complete; the shipbuilder also underestimated the weight of paint and
installed parts. As a result, the Navy had to use some of the weight
margin allocated for future growth in order for the ship to meet the
minimum requirements for mission package carrying capacity. Program
officials also said that they had to implement design changes on LCS 1
and follow-on Freedom-variant ships to improve stability when damaged.
On LCS 1, the Navy added two external ballast tanks to the stern
following construction. For LCS 3 and subsequent Freedom-variant
seaframes, the Navy designed these tanks into the hull, which adds 9
feet of length to the ship. This design change also provides added
benefits of additional internal volume for cargo and fuel, which
increases the range of this variant. While LCS 2 has also had issues
with weight control, they have not been as significant as those on LCS
1.
Program officials and shipyard representatives for both seaframes said
that they are actively managing the weight of the variants.
Representatives from both shipyards told us that they monitor seaframe
weight through a weight management plan, and all major design changes
now require an estimate of weight impacts. In addition, the Navy said
that weight control managers at each shipyard are responsible for
weighing equipment over 50 pounds that goes on the ship. The Navy also
told us that it has implemented design changes for lighter equipment
and materials, such as a new electric start system for the gas
turbines and gun fire control system. We requested updated copies of
the contractually required weight reports that the shipyard is
supposed to develop and provide to the Navy, but program officials
told us these reports had been sent back to the shipyards to correct
issues with the quality of the reported data that prevented these
reports from being acceptable.
Cost, Production Efficiency, and Quality Have Started to Improve, but
Schedule Delays Persist:
LCS 1 and LCS 2, awarded under cost-reimbursable contracts, cost
significantly more than expected, which is often the case for lead
ships of a new class.[Footnote 9] The Navy awarded fixed-price
contracts for the 2010 block-buy contracts. As part of contract
negotiations, the shipyards submitted estimated costs that decrease on
each successive seaframe, with the expectation that affordability
would improve on subsequent seaframes.
The Navy attributes these cost improvements not only to the use of
fixed-price contracts, but also to the shipyards' experience building
the ships. Both shipyards have worked toward improving production
processes through the use of more automation and modularized assembly,
as well as by increasing the amount of equipment and hardware that
they install before the different large sections, or blocks, of the
ship are assembled--a process called pre-outfitting. By increasing the
level of pre-outfitting on follow-on ships and decreasing labor hours
spent building the ships, production efficiency is gained. For
example, both shipyards anticipate by the third ship of the class,
they will achieve approximately a 50 percent reduction in the number
of labor hours needed for ship completion.
Figure 3 depicts the actual and projected learning curves and pre-
outfitting levels for both shipyards, where the data for LCS 1, 2, and
3 are actual data and the rest are projections. As is shown,
increasing pre-outfitting helps decrease labor hours.
Figure 3: Actual and Projected Pre-outfitting and Labor Hours for Two
Variants of the Littoral Combat Ship (LCS) Seaframe:
[Refer to PDF for image: 2 line graphs]
Freedom variant: Seaframes:
Actual: LCS 1;
Labor hours: 100%;
Pre-outfitting at launch: 64%.
Actual: LCS 3;
Labor hours: 70%;
Pre-outfitting at launch: 80%.
Projected: LCS 5;
Labor hours: 60%;
Pre-outfitting at launch: 83%.
Projected: LCS 7;
Labor hours: 50%;
Pre-outfitting at launch: 83%.
Independence variant: Seaframes:
Actual: LCS 2;
Labor hours: 100%;
Pre-outfitting at launch: 60%.
Projected: LCS 4;
Labor hours: 74%;
Pre-outfitting at launch: 85%.
Projected: LCS 6;
Labor hours: 57%;
Pre-outfitting at launch: 87%.
Projected: LCS 8;
Labor hours: 51%;
Pre-outfitting at launch: 87%.
Source: GAO analysis of Lockheed Martin (Freedom) and General Dynamics
and Austal USA (Independence) data.
Note: Total hours are presented as a percentage with LCS 1 and 2 as the
baseline.
[End of figure]
The shipyards have also begun to realize the benefits of facility
improvements. The fiscal year 2010 block-buy contracts provide for the
shipyards to transition from building one LCS to a higher rate of
production, which necessitated facility expansions at both shipyards.
For example, Marinette Marine recently completed a 5-year, multi-
million dollar investment program that improved its fabrication
facilities, including its plate shop, panel line, and blast and paint
facilities. According to shipyard representatives, they have also
improved the flow of production through their facilities by
eliminating 8 miles from their production sequence, which saves time
in the movement of ship blocks that have to travel in the shipyard
during construction. LCS 1 and LCS 3 were built in a more static
fashion, LCS 5 and LCS 7 will represent the transition to the new
production processes and buildings, and LCS 9 will be the first ship
built entirely in the upgraded facilities. Austal USA also completed a
multi-million dollar facilities expansion, including building a new
module manufacturing facility. The yard also made production
improvements, including expanding its use of extruded aluminum panels
for the decks instead of welding individual sections, which Austal
officials say could save significant labor hours per ship.
Navy program office and INSURV officials, as well as shipyard
representatives, have described seaframe quality as improving.
Deficiencies identified by INSURV vary in significance, and INSURV
classifies these issues into three parts based upon the professional
judgment of the inspectors. Part 1 deficiencies are intended to
represent very significant deficiencies that are likely to cause the
ship to be unseaworthy or substantially reduce the ability of the ship
to carry out its assigned mission. Starred cards are a subset of Part
1 deficiencies that, in INSURV's view, require correction or a waiver
by the Chief of Naval Operations before the ship is delivered to the
Navy. Part 2 deficiencies are considered less significant issues that
do not meet the criteria for a Part 1 deficiency, but should be
corrected to restore the ship to required specifications. Part 3
deficiencies are generally categorized as those that prevent the ship
from meeting Navy standards but are cost prohibitive to fix. Our
analysis shows that the number of defects remaining at the time the
ships were delivered to the Navy declined significantly from LCS 1 to
LCS 3, but the number of seaframes delivered to date is too small to
determine if this is a trend. LCS 2 has only had a partial acceptance
trial, and LCS 4 has not yet conducted its acceptance trial (currently
scheduled for June 2013), so the quality data on the Independence
variant is limited and cannot yet be compared with follow-on
seaframes. As of March 2013, both LCS 1 and LCS 2 each have seven
outstanding starred cards that had not yet been resolved. Issues
include the launch, handling, and recovery system on LCS 1 and the
rescue boat and the way in which the engineering control system
manages system trouble alarms on LCS 2.
Figure 4 shows the number of Part 1, 2, and 3 deficiencies and starred
cards for each of the three delivered seaframes, showing a reduction
in deficiencies between LCS 1 and LCS 3.
Figure 4: Number of Deficiencies Reported at Delivery for Early
Littoral Combat Ship Seaframes:
[Refer to PDF for image: 2 stacked vertical bar graphs]
Littoral Combat Ship (LCS) part 1, 2 and 3 deficiencies at delivery:
LCS 1:
Part 1:
Government: 43;
Contractor: 108;
Part 2:
Government: 372;
Contractor: 1,622;
Part 3:
Government: 20;
Contractor: 89.
LCS 3:
Part 1:
Government: 44;
Contractor: 59;
Part 2:
Government: 299;
Contractor: 879;
Part 3:
Government: 9;
Contractor: 9.
LCS 2:
Part 1:
Government: 105;
Contractor: 442;
Part 2:
Government: 1,082;
Contractor: 2,663;
Part 3:
Government: 176;
Contractor: 779.
LCS starred cards deficiencies at delivery:
LCS 1:
Government: 8;
Contractor: 16.
LCS 3:
Government: 2;
Contractor: 2.
LCS 2:
Government: 8;
Contractor: 30.
Source: GAO analysis of Navy data.
Notes: These data come from the Naval Sea Systems Command Technical
Support Management system, and include all deficiencies open 7 days
after the date of delivery. LCS 1 had a second acceptance trial after
delivery, which resulted in additional starred card deficiencies.
Part 1 deficiencies are very significant deficiencies. Starred cards
are a subset of Part 1 deficiencies that, in INSURV's view, require
correction or a waiver by the Chief of Naval Operations before the
ship is delivered to the Navy. Part 2 deficiencies are considered less
significant, while Part 3 deficiencies are cost prohibitive to fix.
Part 1, 2, and 3 deficiencies are also known as Priority 1, 2 and 3
deficiencies.
Deficiencies labeled as "Government" reflect those that were
determined by the Navy and the shipbuilding contractor to be the
Navy's responsibility for correction, while those labeled as
"Contractor" reflect those that were determined to be the shipbuilding
contractor's responsibility for correction.
[End of figure]
One area of seaframe production that continues to be problematic is
schedule performance for reasons related and unrelated to the LCS
program. The lead ships were each delivered almost 2 years after their
initial planned delivery dates due to various design and construction
issues. LCS 3 delivered 2 months ahead of its contractually required
date, but the next five ships are expected to deliver, on average, 7
months late. Representatives at Marinette Marine told us that LCS 5
and LCS 7 are both delayed due in part to a commercial ship that is
behind schedule and blocking shipyard workflow. At Austal USA, LCS 4
has been delayed several times due to use of less-skilled labor and
delays in obtaining production drawings. LCS 6 and LCS 8 are expected
to be delayed due to the shipyard's transition to its new production
line and the workers' relative inexperience with it. The Navy has
adjusted its delivery schedule for future ships to take into account
these delays and does not envision further delays beyond LCS 8.
Figure 5 shows the total construction time for LCS 1 through LCS 8 and
their delivery delays.
Figure 5: Littoral Combat Ship (LCS) Construction Timeframes:
[Refer to PDF for image: 2 stacked vertical bar graphs]
Freedom variant:
Seaframe: LCS 1;
Planned delivery: 19 months;
Delivery delay: 20 months.
Seaframe: LCS 3;
Planned delivery: 37 months;
Delivery delay: 0 months.
Seaframe: LCS 5;
Planned delivery: 34 months;
Delivery delay: 5 months.
Seaframe: LCS 7;
Planned delivery: 35 months;
Delivery delay: 4 months.
Independence variant:
Seaframe: LCS 2;
Planned delivery: 21 months;
Delivery delay: 26 months.
Seaframe: LCS 4;
Planned delivery: 30 months;
Delivery delay: 13 months.
Seaframe: LCS 6;
Planned delivery: 21 months;
Delivery delay: 6 months.
Seaframe: LCS 8;
Planned delivery: 15 months;
Delivery delay: 8 months.
Source: GAO analysis of Navy data.
Note: Dates reflect keel laying to delivery.
[End of figure]
Seaframe Designs Have Been Stabilizing, but Navy Is Considering
Significant Changes:
Even as production is underway at the two shipyards, the Navy is
evaluating various options for changes to LCS seaframe designs. The
program office has several studies ongoing to evaluate changes to the
seaframes, communication networks, combat management systems, and
hull, mechanical, and electrical systems. Shipyard experience, which
translates into reduced labor hours expended per ship, is based on
building repeat copies of similar ships, and design changes can
disrupt this learning. To date, the number of design changes that the
Navy is implementing on the two variants has been decreasing.
Figure 6 depicts the decrease in design changes on both variants.
Figure 6: Decrease in Littoral Combat Ship (LCS) Design Changes for
Both Seaframe Variants:
[Refer to PDF for image: stacked vertical bar graph]
Freedom variant: LCS 1;
Number of design changes: 170.
Freedom variant: LCS 3;
Number of design changes: 66.
Freedom variant: LCS 5;
Number of design changes: 57.
Independence variant: LCS 2;
Number of design changes: 135.
Independence variant: LCS 4;
Number of design changes: 35.
Independence variant: LCS 6;
Number of design changes: 26.
Source: GAO analysis of Navy data.
[End of figure]
However, the Navy is now considering a series of potentially
significant design changes to accommodate larger crews than initially
anticipated, increase commonality between the seaframe variants and
with other Navy ships, and increase the ships' combat capabilities,
among others. For example, prior to the deployment of LCS 1 to
Singapore, the Navy added 20 extra berths to the ship and intends to
make a similar change to LCS 2. However, the Navy did not add
equivalent amounts of crew storage space; the ships will also require
additional water and sanitation systems and food storage to meet Navy
standards. The Navy is now evaluating how to make these additional
berths better suited to both variant designs. The Navy also has a
number of technical studies underway that could affect design,
including an OPNAV study on potential capability changes and a
requirements analysis for a notional LCS Flight 1 seaframe, and a
Naval Sea Systems Command Flight 1 technology assessment study.
According to Navy program office officials, some of these changes
could increase the acquisition cost of the seaframes due to disrupting
shipyard learning and could also increase operations and support
costs, due to factors such as additional crew. Other changes, such as
moving to more common equipment among both variants, could reduce
operations and support costs due to reducing the number of unique
spare parts that have to be maintained and different training required
for maintenance and training.
The design changes that the Navy is evaluating include the following:
* Changes to increase commonality: Many of the systems on the two
seaframe variants are not common. Both contractors choose different
ways of optimizing the cost and performance of the seaframes they
proposed to the Navy. When the Navy chose to buy both variants, it
committed to buying ships with differing equipment. Some systems are
not common between the LCS variants, but are common with other ships
in the fleet; others are not common with any other Navy ship. DOD's
office of Cost Assessment and Program Evaluation stated in its 2011
independent cost estimate of LCS seaframes that if the Navy down-
selected to one variant and sold or decommissioned the variant that
was not selected, it could have saved approximately $2.2 billion in
operations and support costs in fiscal year 2010 dollars. A lack of
commonality may also hinder effective and efficient maintenance,
training, manning, and logistics. One of the Navy's high priority
changes is to select a common combat management system for both
seaframes, since the different systems limit the ease with which
sailors can operate each variant. The combat management system is an
architecture that uses computers to integrate sensors (such as a
radar) with shipboard weapon systems. INSURV identified 36 out of 52
major systems that should be made common between the two variants, and
the Navy is currently evaluating the business case for each of these
changes.
* Changes to add capability and changes to requirements: The Navy is
assessing the possibility of increasing the combat capability of the
seaframe by adding or enhancing onboard weapon systems and command,
control, and intelligence systems, such as radar and satellite
communications systems. The Navy is also assessing potentially
changing some LCS requirements. For example, a senior LCS council
official stated that the Navy is considering a potential reduction in
the speed requirement for some seaframes. While this could require
significant changes to the seaframe designs and therefore increase the
program's acquisition cost, it might allow removing the gas turbines
needed for high speeds, and thus could increase range and available
payload space. Also, DOD directed the program office to develop an
"irregular warfare" module, which includes medical and humanitarian
relief supplies such as hospital beds and training facilities.
Congress has not yet appropriated funding for this effort. The Navy is
also considering additional mission modules for intelligence,
surveillance, and reconnaissance and expeditionary warfare. The
purpose of LCS's modular design is to help to ease the integration of
new capabilities, but if additional power or cooling is needed or if
changes are needed in the seaframe itself, design changes could be
required.
* Changes to LCS build specifications: The Navy used American Bureau
of Shipping rules to develop the functional designs of the LCS. In
addition, the Navy has approved build specifications that are the
variant specific contract requirements for detail design and
construction. The Navy ended its relationship with the American Bureau
of Shipping for surface combatants in June 2012, according to Navy
officials, in order to save money. Ending this relationship should not
on its own affect the build specifications for the ships currently
under contract. Any requirements changes developed for a new Flight 1
LCS will require changes to the existing Navy-approved variant-
specific build specifications. Representatives from both shipyards
told us that changing the build specification during production could
result in cost increases and a potential regression in learning while
workers learned how to build to the new specifications.[Footnote 10]
We have previously reported that incorporating design changes during
construction may disrupt a shipyard's optimal construction sequence,
requiring additional labor hours beyond current forecasts. In
addition, when ship construction is initiated before a stable design
is achieved, the risk of costly rework and out-of-sequence work
increases.[Footnote 11] Program officials told us they will evaluate
the business case for each of the changes when deciding if and when to
implement them. For some changes, the officials noted that potential
reductions in operations and support costs could justify making them
as soon as possible. Navy officials also emphasized that in other
cases, it may make sense for the Navy to wait until its next contract
for seaframes planned for fiscal year 2016 to avoid production
disruptions during the current block buy.
Testing Incomplete on Both Seaframe Variants:
The Navy has not completed testing of either seaframe, and late
discoveries of deficiencies could result in further design changes.
Most notably, LCS 2 has not completed its acceptance trials or
developmental and combat system testing, even though the Navy accepted
delivery of the ship in 2009.[Footnote 12] In addition, neither
variant has completed developmental testing or undergone shock and
survivability testing. In 2012, the Director, Operational Test and
Evaluation (DOT&E) noted that limited testing on LCS 2 precluded his
office from further assessing that variant's capabilities and any
deficiencies. Operational testing and survivability testing are
required by statute to be completed prior to a program proceeding into
full rate production. Due to the unique designs of the two variants,
the Navy still has outstanding gaps in its knowledge about how these
designs will perform in certain conditions. Testing is required to
resolve these gaps and to validate assumptions and models.
LCS 1 and LCS 2 followed an unusual trial and acceptance process
because, according to the seaframe program office, they were funded as
research, development, test, and evaluation ships that were intended
for experimentation and the Navy wanted to get them fielded as soon as
possible. LCS 1 had a special trial in lieu of a final contract trial.
LCS 2 completed a partial acceptance trial in 2009, but it has not yet
been presented for a second trial. Instead, it proceeded to an early
21-week post-shakedown availability, which typically occurs
approximately a year after acceptance and is used to correct
deficiencies and make needed improvements. The Navy plans to combine
the second half of the LCS 2 acceptance trial and the final contract
trial into one special trial in the summer of 2013. LCS 3 was funded
with procurement money, and has followed a more traditional acceptance
process, and it is expected that the follow-on seaframes will do the
same.
The limited testing to date has revealed deficiencies with core ship
systems on both variants, including performance problems with the 57-
millimeter guns and the integrated capability of the combat systems.
Testing has also revealed multiple single points of failure, meaning
there are systems that lack redundancy, which could cause a system
shutdown, on both LCS variants. This problem could become more
pronounced in mission module testing. Most notably, the launch,
handling, and recovery systems and hydraulic systems that are integral
to launching the mission module vehicles lack back-up systems, and the
ships have limited available space to carry spare parts or tools.
The Navy discovered another significant problem during testing on LCS
1 that led to a design change. The aluminum ramp that is used to
launch and recover vehicles from the ship started to deform when the
crew left the SUW module's inflatable boat on the ramp during transit,
contrary to procedure. This in turn compromised the door seal on the
stern of the ship and allowed water to get into the waterborne mission
area. The Navy had intended the boat to sit in a cradle next to the
ramp while in transit so it could be rapidly deployed and to be lifted
into place for launch with an overhead crane system. The crew however,
found that this approach tripled the time it took to launch the boat,
to approximately 20 minutes. The Navy directed that the ramp on LCS 1
be replaced with a steel version prior to its deployment.
The Navy still has knowledge gaps on several other aspects of seaframe
performance because testing has been deferred or delayed. For example,
the combat management system software on LCS 2 was delivered
incomplete. The combat management system contractor stated that the
system was delivered with less functionality than planned due to
developmental challenges and the Navy's urgency to have the ship
delivered. The combat system trials for LCS 4 will be the first time
that the full capability of the system will be tested in a realistic
environment, and the final combat management system software build and
a hardware upgrade will not be available until LCS 6. When we visited
LCS 2 in December 2012, the crew still had questions about the combat
management system and radar because they had little operational
experience with either, and because the weapon and sensor capabilities
have not been integrated into the combat system. In addition, neither
LCS 1 nor LCS 2 has gone through Combat System Ship Qualification
Trials which can be part of operational testing. These tests represent
an opportunity to verify and validate combat and weapon systems
performance for new ships, and the Navy and test entities use data
collected to issue warfare qualifications and certifications. Navy
program officials believe that they have conducted testing that is at
least as rigorous as Combat System Ship Qualification Trials during
the developmental testing phase. DOT&E officials disagree, emphasizing
that operational effectiveness and suitability can be assessed only
through operational testing.
The Navy has also not yet conducted ship shock trials and total ship
survivability trials. The Navy plans to conduct the total ship
survivability trials in fiscal years 2014 and 2015 for the Freedom and
Independence variants, respectively. The Navy delayed survivability
tests from fiscal year 2011 to 2014 so that it could have time to
complete damage scenario analysis. Shock trials for both variants have
also been delayed by 1 year to fiscal year 2016, so they can be
conducted with LCS 5 and LCS 6. The Navy considers these ships the
most representative ships of each class for shock trial purposes
because they include all the design changes from the early ships.
DOT&E has reported concerns that the Navy deployed LCS 1 without
completing shock qualification of many components, including gas
turbines and switchboards.
Survivability testing is important because it can reveal equipment or
system failures that may necessitate class-wide design changes.
According to DOT&E, there are knowledge gaps related to LCS designs
and structures, in particular the potential vulnerability of an
aluminum ship structure to weapon-induced blast and fire damage. The
Navy is planning to conduct surrogate tests with aluminum structures
in fiscal years 2013 and 2014 to help address these knowledge gaps.
LCS is built to a limited survivability standard, and, like material
support ships, mine countermeasures ships, and patrol combatants, it
is not expected to operate in the most severe or hostile environments.
DOT&E has reported that the LCS is not expected to maintain mission
capability after taking a significant hit in a hostile combat
environment. Program officials state that LCS meets the survivability
requirements to which the ship was designed.
Navy Acquisition of Mission Modules Is Risky Due to Inadequately
Defined Early Increments and Continued Developmental Difficulties:
The Navy's acquisition approach for mission modules is risky for three
reasons: (1) the Navy continues to buy early increments of mission
packages that lack defined requirements and clear definition of
incremental cost, schedule, and performance goals; (2) developmental
testing to date continues to identify problems with system
performance; and (3) concerns persist about the overall effectiveness
of each mission package. While the program is following an
evolutionary acquisition strategy and plans to deliver improving
levels of capability over several increments, the program continues to
buy modules for mission packages without first documenting the level
of performance that it expects for each increment. By the time the
Navy demonstrates that it can meet the minimum--termed "threshold"--
requirements identified in the LCS programs' capability development
document in the final increments, it will have already bought 24 MCM
and SUW mission packages.[Footnote 13] Further, developmental testing
to date--especially for the systems comprising the MCM mission
package--has shown continued performance problems. Some of these
systems do not meet their own performance requirements, which does not
provide assurances that LCS-specific threshold requirements targets
will be met when they are operated together in a mission package.
Internal Navy studies and wargames have also raised concerns with the
overall effectiveness of each package based on inherent seaframe or
module limitations.
Navy Has Not Yet Fully Defined Early Increments:
The Navy is pursuing an evolutionary acquisition strategy for the
mission packages. This means that it plans to deliver improving levels
of capability over several mission package increments. The Navy's
threshold performance requirements as currently defined in LCS
requirements documentation will be met only when the final increment
of each package is completed, and not by each individual increment.
DOD acquisition guidance permits this approach, stating that the
objective is to balance needs and available capability with resources,
and to put capability into the hands of the user quickly. It also
states that the success of the strategy depends on consistent and
continuous definition of requirements, and the maturation of
technologies that provide increasing levels of capability. Some of the
mission module systems are pre-existing programs that predate the LCS
program by up to 10 years or more. Therefore, these systems have their
own requirements documentation, including threshold levels that they
are expected to meet. However, because the Navy has not defined LCS-
specific requirements for each mission package increment, it is
unknown how the requirements for these separate systems will
contribute to the broader LCS capability once they are integrated into
a mission module.
DOD's 2003 acquisition guidance, in place when the LCS program was
initiated in 2004, did not require programs to establish separate
threshold and objective values for each increment. Therefore, the LCS
mission package requirements are not defined for each increment; the
requirements documentation defines only the end-state threshold
requirement (i.e., at the final increment) for each package. However,
DOD's 2008 revision to its acquisition guidance added new requirements
for programs that use an evolutionary acquisition approach.[Footnote
14] Specifically, individual increments are now defined as providing a
"militarily useful and supportable operational capability." The
guidance now requires each increment to have its own set of threshold
and objective (known as "target") values set by the user. These values
are important because they provide the parameters for future
operational testing. In most cases, the military utility of a system
is assessed based on its ability to meet the end user's threshold
values for each key performance parameter that is set forth in its
approved requirements documents. Although this new guidance was not in
effect when the LCS program acquisition approach was approved, the
revision indicates that DOD now expects programs to define threshold
requirements for all increments.
The Navy program office believes that each mission package increment
will provide more capability than the existing systems they are to
replace. The program also expects that the capabilities of the MCM and
SUW packages will improve significantly between increments I and IV,
including in key metrics such as the clearance rates for certain
mines, number of surface boat threats that can be negated, and the
range at which the LCS will be able to engage these surface threats.
However, DOT&E officials told us that they do not believe the Navy has
adequate knowledge about how integrated mission module systems onboard
an LCS will perform in an operational environment to be certain of
this fact. Further, without documented requirements for each
increment, there is no roadmap setting forth the path from the
current, below-threshold level of capability to the expected threshold
level for the final increments. Program and OPNAV officials have
stated that the current plan is for each increment to have documented
requirements in the form of capability production documents, to be
approved by the Joint Requirements Oversight Council starting in mid
calendar year 2013. Recognizing that the absence of documented
requirements for the early increments poses a challenge for
operational testers, OPNAV has drafted incremental performance
clarification letters for Increment II SUW and Increment I MCM mission
packages. These letters identify the requirements that the mission
package should be tested against in initial operational testing.
According to DOT&E officials, the Navy will have to update its test
and evaluation master plan to incorporate phases of operational
testing for all increments of mission package capability to be
deployed for use in combat.
Both the 2003 and current DOD acquisition guidance state that each
increment is to have an acquisition program baseline by Milestone B.
This baseline establishes program goals--thresholds and objectives--
for cost, schedule, and performance. The mission module program's
Milestone B review is currently scheduled for late fiscal year 2013,
though this date has already slipped several times. Program officials
have stated that they do not intend to fully define the goals for each
increment in the Milestone B acquisition program baseline. In
particular, they stated that they consider the entire mission modules
program to be a single increment and as such, they believe that there
can be only one cost estimate for the entire program, and not cost
estimates for each mission package increment. USD AT&L officials told
us that they returned a draft of the Navy's mission module acquisition
program baseline for further revision because it did not provide
enough detail about costs and schedules for each increment. It is
important to note that the structure of the mission modules program
complicates cost estimation. For example, the Navy's cost estimators
told us the lack of a cost estimate for each increment is, in part,
due to the difficulty of allocating the development cost of the
modules to each increment. The structure of the program also makes it
difficult to determine the full cost of fielding the LCS capability,
since the program office incorporates some systems that were developed
and funded by other Navy sponsors, and these development costs are
reported separately by the other programs and not by the LCS program.
Though this type of arrangement is not unique to the LCS program, 42
percent of systems in the LCS mission packages do not have their
research, development, test, and evaluation costs included in the LCS
mission modules estimate.
Challenges Persist in Mission Module Development:
Developmental testing to date--especially for MCM mission package
technologies--has shown continued performance problems which do not
provide assurances that threshold requirements will be ultimately met
in the final increment. These developmental challenges are notable
given that the Navy believes many of these systems to already be
mature, and some predate the LCS program. Further, these challenges
are in developmental testing, not operational testing which is a more
representative assessment of capability. In addition, continual
schedule delays have resulted in the Navy not being able to field
capabilities as quickly as planned. Specifically, the Navy has seen a
delay in fielding Increment I of the SUW and MCM mission packages by 2
and 3 years, respectively, as compared to the test plans that it
submitted in 2008.
Table 3 shows some of the delays in fielding mission module capability.
Table 3: Delays in Fielding Littoral Combat Ship Mission Package
Increments:
Module: Anti-Submarine Warfare[A];
Increment I:
2008 estimate: N/A;
Current estimate: N/A;
Increment IV:
2008 estimate: N/A;
Current estimate: 2016.
Module: Mine Countermeasures;
Increment I:
2008 estimate: 2011;
Current estimate: 2014;
Increment IV:
2008 estimate: 2013;
Current estimate: 2017.
Module: Surface Warfare;
Increment I:
2008 estimate: 2011;
Current estimate: 2013[B];
Increment IV:
2008 estimate: 2014;
Current estimate: 2019.
Source: GAO analysis of 2008 Navy documentation.
Legend: N/A = not applicable.
[A] The Anti-Submarine Warfare package was restructured and the Navy
now plans to field only one increment.
[B] The Navy deployed a SUW module to Singapore in 2013.
[End of table]
Mine Countermeasures Mission Package:
The MCM mission package--intended to detect, classify, localize, and
neutralize enemy sea mines while keeping the LCS and her sailors out
of the mine field by using remotely operated vehicles--will not meet
the threshold capability specified in the current LCS capability
development document until Increment IV is fielded, currently planned
for 2017. Further, most systems are behind schedule for initially
planned fielding dates. The third increment of the package is planned
to provide both minehunting, initially fielded with Increment I, and
minesweeping capabilities. Minehunting is the process of using sensors
to localize and identify individual mines for avoidance or later
neutralization. Minesweeping uses either acoustic and magnetic
emissions to detonate mines designed to target a ship's acoustic or
magnetic signature (called influence mine sweeping) or a physical
device to cut the tether of moored mines so that they float to the
surface, where they can be detonated or recovered for intelligence
purposes (called mechanical minesweeping). Navy mine warfare officials
stated that minehunting is the preferred mode of clearing mines since
it is more precise, but that minesweeping is sometimes the only option
due to time or environmental constraints. While the Navy has taken
delivery of three Increment I MCM packages and plans to receive one
additional Increment I package in fiscal year 2013, very few of its
capabilities have been effectively demonstrated to date. The modules
in the package have experienced difficulties during development and
significant shortfalls in performance, and two key systems have been
canceled due to safety concerns while deployed from a helicopter. In
response, the Navy has taken a number of actions, as follows:
* It is exploring ways to improve the performance of module
subsystems, implementing several pre-planned product improvement
programs.
* It has reduced key performance requirements thresholds for average
mine clearance rates for early increments from the requirements
defined in the capability development document.
* It has modified operational tactics, such as requiring multiple
searches to correlate results. The modified tactics address some
performance problems, but add significantly more time to minehunting
operations or cover less area.
* It has decided to delay the retirement of the mine countermeasures
ships the LCS is to replace by 3 years due to expected delays in
mission module deployment.
Figure 7, an interactive graphic, shows the planned systems and
employment of the MCM mission package. See appendix III for the
overview graphic from figure 7. The Navy states that the threshold
capability defined in the capability development document will be met
by Increment IV.
Figure 7: Navy's Progress Fielding Littoral Combat Ship (LCS) Mine
Countermeasures Mission Package Systems:
For the printed version, please see appendix III.
Mine Countermeasures Mission Module: Airborne Laser Mine Detection
System;
FY 14, Inc 1: [Check];
Capabilities description: Detects, classifies, and localizes floating
and near-surface moored mines in deep water;
Est. fielding date:
2010: 2011;
Current: 2014.
Mine Countermeasures Mission Module: Airborne Mine Neutralization
System;
FY 14, Inc 1: [Check];
FY 17, Inc 3: [Check][A];
Capabilities description: Identifies and neutralizes unburied bottom and
moored sea mines in shallow water that are impractical or unsafe to
counter using existing minesweeping systems;
Est. fielding date:
2010: 2011;
Current: 2014.
Mine Countermeasures Mission Module: AN/AQS-20A Sonar;
FY 14, Inc 1: [Check];
Capabilities description: Provides identification of bottom mines in
shallow water and detection, localization, and classification of
bottom, close-tethered, and volume mines in deep water;
Est. fielding date:
2010: 2011;
Current: 2014.
Mine Countermeasures Mission Module: Remote Minehunting System;
FY 14, Inc 1: [Check];
Capabilities description: Remote multi-mission vehicle (underwater)
towing the AN/AQS-20A sonar used to detect, classify, locate, and
identify minelike objects;
Est. fielding date:
2010: 2015;
Current: 2014.
Mine Countermeasures Mission Module: Coastal Battlefield
Reconnaissance and Analysis System;
FY 15, Inc 2: [Check];
Capabilities description: Provides intelligence preparation of the
battlefield information, which accurately depicts tactical
objectives, minefields, and obstacles in the surf zone, on the beach,
and through the beach exit during amphibious and expeditionary
operations;
Est. fielding date:
2010: 2012;
Current: 2015.
Mine Countermeasures Mission Module: Organic Airborne and Surface
InfluenceSweep System;
Canceled;
Capabilities description: Provides organic, high-speed magnetic/acoustic
influence minesweeping capability where mine hunting is not feasible
(adverse environmental conditions);
Est. fielding date:
2010: 2012;
Current: Canceled.
Mine Countermeasures Mission Module: Rapid Airborne Mine Clearance
System;
Canceled;
Capabilities description: Mounted 30-millimeter gun firing
supercavitating projectiles to neutralize near-surface and floating
moored mines;
Est. fielding date:
2010: 2017;
Current: Canceled.
Mine Countermeasures Mission Module: Unmanned Surface Vehicle with
Unmanned Surface Sweep System;
FY 17, Inc 3: [Check];
Capabilities description: Micro-turbine-powered magnetic towed cable
and acoustical signal generator towed from an unmanned surface craft;
Est. fielding date:
2010: 2015;
Current: 2017.
Mine Countermeasures Mission Module: Surface Mine Counter Measure
Unmanned Undersea Vehicle (Knifefish);
FY 19, Inc 4: [Check];
Capabilities description: Fully autonomous unmanned undersea system
provides buried mine detection capability;
Est. fielding date:
2010: N/A;
Current: 2019.
Source: GAO analysis of Navy data (data and images).
Note:
[A] Airborne Mine Neutralization System will add near surface
capability in Inc 3.
FY = fiscal year.
Inc. = Increment.
[End of figure]
Four of the Increment I systems--the AN/AQS-20A sonar, the Remote
Multi-Mission Vehicle (RMMV), the Airborne Laser Mine Detection
System, and the Airborne Mine Neutralization System--being procured
from different system contractors, have experienced difficulties
during tests. Two of them face difficulties significant enough to
warrant a change in planned operational tactics to compensate for poor
performance. Operational testing will be required to fully assess
these tactics, the systems, and the contributions that they make to
the mission package.
* AN/AQS-20A Sonar: This sonar is the primary system for LCS
minehunting, which is the process of using sensors to locate
individual mines in the water column that will be neutralized at a
later time or avoided. This is a pre-existing system, and the program
is over 20 years old. During 2011 and 2012 developmental testing, this
system experienced problems in achieving some of the threshold
requirements defined in the system's own requirements documents. In
particular, this testing showed that the system faces challenges with
accurately determining the vertical location, or distance from
surface, of the mine in the water. The system also detected a large
number of false contacts exceeding Navy limits in two of three search
modes, meaning that it falsely identified non-mine objects as mines.
In order to mitigate these two deficiencies, the Navy has modified its
mine warfare tactics. For example, LCS operators will now use a
technique whereby the system re-examines specific contacts and
collects additional data to help eliminate false contacts. This tactic
is effective in improving performance, but takes considerably more
time--in some cases taking twice as long--and correspondingly limits
the platform clearance rate. The Navy is also funding a performance
improvement effort to correct these deficiencies via hardware and
software upgrades to the system. According to the system's contractor,
these upgrades are the first redesign of the AN/AQS-20A sonars since
1994. According to the contractor, some of the 30 units that the Navy
has already purchased out of a planned inventory of 94 will be backfit
with these improvements.
* Remote Multi-Mission Vehicle: The RMMV is an unmanned semi-
submersible vehicle that tows the AN/AQS-20A sonar (together they are
called the Remote Minehunting System). RMMV testing has revealed
reliability shortfalls over the past 5 years. While recent efforts
have improved reliability, the system still falls short of what is
required. Operational testing in 2008 demonstrated the RMMV had a mean
time between failures (ability to function before an operational
mission failure occurred) of only 7.9 hours, well short of its
requirement of 75 hours. The Navy and system's contractor implemented
a reliability growth plan in 2010, and system redesign efforts have
improved performance. Follow-on RMMV testing demonstrated the system's
mean time between failures has improved to 45 hours. The contractor
and the Navy have continued to work on further performance
improvements, but there is disagreement about their effectiveness.
According to the contractor, mean time between failures improved to 64
hours during 509 hours of system testing concluded in November 2011.
However, DOT&E officials reported that this improvement was predicated
on limited test data collected in a minimally stressing operational
environment. In addition, since the testing did not involve an RMMV
integrated with the LCS, they believe it is difficult to draw any
meaningful conclusions from these results. The most recent Navy
developmental tests of an MCM module operated from an LCS were
completed in December 2012. These vehicles experienced higher than
predicted failure rates, requiring considerable corrective maintenance
by support personnel. The Navy plans to begin procuring vehicles in
2017, but has already purchased 10 baseline units that will need to be
backfit with improvements.
* Airborne Laser Mine Detection System: This is a laser-based system
mounted on a helicopter that searches the water column to locate
floating and near-surface mines. Test results have show that this
system has significant problems with meeting some of the threshold
requirements defined in its own requirements documents, including
demonstrating the required ability to detect and classify mines at
certain depths. The system also generates a high number of false
positives, which require additional investigation. That is, it often
incorrectly classifies non-mine objects, such as glints from the laser
reflecting off the water surface, fish, or man-made objects (e.g.,
litter), as mines. As with the AN/AQS-20A sonar, the Navy is modifying
its tactics to use multiple passes over the area to help correlate
data and address these shortcomings, but while this tactic improves
performance, Navy test reports identify that it also greatly increases
the amount of time required to search for mines. The Navy is also
funding additional system improvements to correct this deficiency. In
November 2012, Navy testers reported that the system did not
demonstrate the expected level of maturity and failed to meet several
requirements, presenting a high risk to operational testing. In spite
of its poor performance, the Navy has accepted delivery of 7 units and
plans to procure an additional 15 units as part of a request for
proposals due in July 2013.
* Airborne Mine Neutralization System: This is an underwater system
that is deployed by a helicopter and controlled from the helicopter
through a fiber optic cable; it moves underwater to target and destroy
mines using onboard explosive neutralizers. Developmental testing has
revealed problems with the system accurately locating mines; according
to the contractor, this is due to the movement of both the water and
the sensor, making it appear that the mines are also moving. The
system contractor has developed new software to address this issue.
Developmental testing also demonstrated problems with loading and
unloading the system from the helicopter due to inadequate clearance
under the launch and retrieval system. According to Navy test
officials, if this situation is not corrected prior to operational
testing, planned for fiscal year 2014, it may be a major deficiency
impacting the MCM package's ability to meet search and clearance
rates. According to the Navy, it has designed an alternative load and
handling device for the Airborne Mine Neutralization System.
Technological and operational problems issues have led Navy officials
to cancel other MCM systems and to make investments to replace the
lost capability. For example, the Rapid Airborne Mine Clearance
System--a cannon designed to destroy mines near the water's surface
that was initially intended to be fielded in 2011--was canceled due to
performance problems. The Navy may replace this capability with a
modified Airborne Mine Neutralization System by 2017. According to
Navy and contractor officials, this system has performed well in
preliminary testing. Additionally, DOD concerns with the safety of
towing the Organic Airborne and Surface Influence Sweep system from
the MH-60 helicopter led the Navy to defund this system, which was
planned for Increment III. The Unmanned Surface Vehicle with Unmanned
Surface Sweep System will replace this system in Increment III. The
Navy also decided to no longer tow the AN/AQS-20A sonar from the MH-60
for the same safety reasons. Navy officials told us that they had not
envisioned frequently using the sonar in this manner, so they said it
should not have a major impact on capability.
Program office officials have stated that they believe the first
increment LCS MCM mission package will not only be more effective than
the existing mine countermeasures fleet, but that it will also,
importantly, remove the sailors from dangerous minefields, as is
currently required to perform the mission. However, the LCS uses a
performance metric that is not used by the existing fleet, so
comparing performance is difficult. Specifically, for the LCS the Navy
measures performance through a "sustained area coverage rate" metric
that evaluates performance based on the amount of mines identified
and/or cleared from a set area of water within a certain time. While
the Navy states that this metric more accurately reflects operational
requirements, it is a new approach and is not how the legacy fleet
measures performance so direct comparisons are difficult. Further, no
Increment I module has yet been tested in an operational environment,
so its expected performance has not been validated. Additionally,
DOT&E and Navy officials told us that the model used to predict MCM
performance has in the past contained optimistic or unrealistic
assumptions.
The LCS will also lack any minesweeping capability until Increment
III, which is a capability found in the current fleet. The existing
mine countermeasures ships or allied ships may be needed to supplement
the LCS if minesweeping is required before Increment III is fielded.
Another difference from the legacy fleet is that LCS is planned to
only deploy an influence sweep system. LCS does not currently have a
requirement to employ a mechanical sweep system like that used by the
existing mine countermeasures fleet. An influence sweep system will
not detonate contact mines which are designed to detonate when they
come into physical contact with a ship, so a mechanical system may be
required in areas where contact mines are expected. Finally, the Navy
notes that LCS will not have an "in-stride" capability--or an ability
to find and neutralize mines at the same time--like the legacy fleet,
since the LCS sensor data requires post-mission analysis before moving
to the neutralization phase.
Surface Warfare Mission Package:
The SUW mission package--intended to detect, track, and engage small
boat threats; escort ships; and protect operating areas--will not meet
the threshold capability defined in the LCS capability development
document until 2019, when Increment IV is planned to be fielded. The
Navy has taken delivery of four SUW mission packages, each including
two 30-millimeter guns and 2 11-meter rigid-hulled inflatable boats
that accommodate boarding teams. The program plans to introduce a
surface-to-surface missile in Increment III and a more capable missile
in Increment IV.
Figure 8, an interactive graphic, depicts the systems and employment
of the SUW mission package. See appendix III for the overview graphic
from figure 8.
Figure 8: Navy's Progress Fielding Littoral Combat Ship (LCS) Surface
Warfare Mission Package Systems:
[Refer to PDF for image: Interactive Graphic table]
For the printed version, please see appendix III.
Surface warfare mission package: MK 46 30-millimeter gun system;
FY 14, Inc 1: [Check];
Capabilities description: Two-axis stabilized chain gun that can fire
up to 250 rounds per minute employing a forward-looking infrared
sensor, camera, and laser rangefinder;
Est. fielding date:
2010: 2011;
Current: 2014.
Surface warfare mission package: Maritime security module;
FY 14, Inc 2: [Check];
Capabilities description: Complement of 19 personnel operating in two
teams on LCS that provide capability to conduct visit, board, search,
and seizure operations against potential threat vessels;
Est. fielding date:
2010: 2011;
Current: 2014.
Surface warfare mission package: Surface-to-surface missile (Griffin
Block IIB);
FY 15, Inc 3: [Check];
Capabilities description: Modular 45 degree launch unit provides limited
precision attack missile for use against moving and stationary targets;
Est. fielding date:
2010: 2011;
Current: 2015.
Surface warfare mission package: Surface-to-surface missile (Griffin
replacement);
FY 19, Inc 4: [Check];
Capabilities description: Modular vertical launch unit provides beyond
line of sight precision attack missile for use against moving and
stationary targets;
Est. fielding date:
2010: 2015;
Current: 2019.
Source: GAO analysis of Navy documentation (data and images).
Note: Prototype version of the Maritime Security Module deployed on
LCS 1.
FY = fiscal year.
Inc = Increment.
[End of figure]
Navy and DOD weapons testers identified a number of concerns with SUW
systems based on testing conducted with the Increment II mission
module on the Freedom-class variant in 2012. DOT&E identified
reliability problems with the 30-millimeter gun and associated combat
system that need to be addressed if the module is to achieve its
desired level of performance. The Navy has established a review board
to investigate any additional changes required to correct any
deficiencies.
The Army's cancellation of its Non Line-of-Sight Launch System which
had been planned for LCS means that the Navy may not be able to field
a surface-to-surface missile as part of the SUW module that meets all
the requirements of the SUW package until Increment IV. This missile
was envisioned as critical to defeating surface threats at greater
distances from the ship, and was canceled in May 2010 due to technical
problems, associated test failures, and rising costs. The Navy
assessed over 50 potential missile replacements for LCS, and in
January 2011 selected the Griffin IIB missile as an interim solution
based, in part, on it costing half of the Non Line-of-Sight Launch
System. The program now intends to purchase one unit with a total of
eight Griffin IIB missiles, to be fielded in 2015, which leave other
SUW module equipped ships with a limited ability to counter surface
threats. However, Navy officials told us that they may reconsider this
plan because of funding cuts related to sequestration. According to
OPNAV, funding for Griffin development and testing has been suspended
for the remainder of fiscal year 2013. OPNAV and the LCS program
office, with LCS Council oversight, plan to investigate using a more
cost-effective, government-owned, surface-to-surface missile system
that would provide increased capability, including increased range.
According to Navy program officials, the deployment of the Increment
IV missile could also be delayed by over a year because funding
reductions have delayed early engineering work and proposal
development for the missile contract.
Anti-submarine Warfare Mission Package:
The current ASW mission package is early in development, and is not
intended to be fielded until 2016. The initial increment was delivered
in 2008, but the Navy canceled the increment after analysis showed the
module did not contribute significantly to ASW capabilities. Based in
part on that analysis, the Navy changed the requirements for the
mission package to include a more effective and in-stride search
capability (searching while moving) that could be used for deep water
escort missions of high-value ships and submarines. The newly
configured ASW mission package--still called Increment I and currently
planned to be the only ASW increment--was designed to provide these
capabilities using a completely different set of sensors and systems,
and because it is designed to meet threshold requirements, will not
require an incremental approach. The Navy highlights this ability to
implement a shift in requirements as an example of the benefits of
LCS's modular design, in that it allowed for an easy interchange of
systems and modification of planned capabilities. The planned
technologies--consisting of a variable depth sonar, multi-function
towed sonar array, and towed torpedo defense capability--are
considered mature, and some are already operational in other navies.
It will be several years, however, before the technologies are
integrated into the planned LCS configuration. According to the
mission modules program office, the variable depth sonar performed
well during early testing when it was being towed off a research
vessel, and the Navy expects it to offer a high level of ASW
capability.
Figure 9, an interactive graphic, depicts the current concept for the
ASW mission package. See appendix III for the overview graphic from
figure 9.
Figure 9: Navy's Progress Fielding Littoral Combat Ship (LCS) Anti-
Submarine Warfare Mission Package Systems:
[Refer to PDF for image: Interactive Graphic table]
For the printed version, please see appendix III.
Anti-submarine warfare mission package: Multi-Function Towed Array;
FY 16, Inc 2: [Check];
Capabilities description: Passive towed receive array with
deployment/retrieval cable to detect acoustic energy;
Est. fielding date:
2010: Under development;
Current: 2016.
Anti-submarine warfare mission package: Variable Depth Sonar;
FY 16, Inc 2: [Check];
Capabilities description: Active towed sonar with launch, handling and
recovery equipment;
Est. fielding date:
2010: Under development;
Current: 2016.
Anti-submarine warfare mission package: Light Weight Tow Torpedo
Countermeasure;
FY 16, Inc 2: [Check];
Capabilities description: Towed decoys that emits signals to draw a
torpedo away from its intended target;
Est. fielding date:
2010: Under development;
Current: 2016.
Source: GAO analysis of Navy documentation (data and images).
Note:
FY = fiscal year.
Inc = Increment.
[End of figure]
Questions Exist about the Effectiveness of LCS in Certain Warfighting
Roles:
Internal Navy reports sponsored by the Chief of Naval Operations and
insights gleaned from Navy tabletop wargame exercises have raised
several concerns about the limitations of the LCS mission modules. For
example, the concept of employment for the MCM mission package
currently does not include embarked explosive ordinance disposal teams
that are used on the existing mine countermeasures fleet, though the
Navy has told us that LCS could carry such personnel and that they are
investigating how to integrate this capability. These personnel are
able to not only render safe or to destroy mines, but can also exploit
found mines for intelligence value, and OPNAV has identified their
absence as a capability gap. In addition, Navy reports, wargames, and
DOD Cost Assessment and Program Evaluation officials that evaluate the
LCS program have identified classified concerns with the capability or
planned capability and employment of the SUW, MCM, and ASW mission
packages. Further, since LCS has only a self-defense anti-air warfare
capability, it will require protection from a cruiser or destroyer in
more advanced anti-air warfare environments, which reduces the LCS's
ability to operate independently and occupies the time of more capable
surface combatants that might be better employed elsewhere. For the
ASW mission package, DOD Cost Assessment and Program Evaluation
officials have raised concerns about the new ASW configuration's deep-
water escort capabilities, stating that LCS is not designed to be
survivable enough to stay and defend the escorted ship if potential
adversaries attack. Further, OPNAV officials told us that with this
new configuration the LCS will still be able to conduct littoral ASW,
but that the water depths in which the LCS could operate may be
limited because of the depths required to support deploying the towed
arrays. Any changes to improve the capability of LCS in these areas
could result in design changes and cost increases.
Significant Questions Remain Regarding the LCS Business Case As the
Navy Commits to Producing More Ships and Modules:
The Navy continues to buy LCS seaframes and modules even as
significant questions remain about the program and its underlying
business case. Elements of the LCS business case, including its cost,
the time needed to develop and field the system, and its anticipated
capabilities have degraded over time. There are also significant
unknowns related to key LCS operations and support concepts that could
affect the cost of the program and soundness of the business case.
Finally, the Navy continues to pursue an acquisition strategy that is
not aligned with acquisition milestones intended to ensure that
sufficient knowledge is in place before resources are committed. By
the time key tests of integrated LCS capability and survivability are
completed in several years, the Navy will have procured or have under
contract more than half of the planned number of seaframes.
Key Elements of the LCS Business Case Have Degraded, Remain Unproven,
and Continue to Evolve:
A business case is part of a knowledge-based approach to acquisition
that, in its simplest form, is demonstrated evidence that the
warfighter's needs are valid and that they can best be met with the
chosen concept, and the chosen concept can be developed and produced
within existing resources--that is, proven technologies, design
knowledge, adequate funding, and adequate time to deliver the product
when it is needed. Key elements of the business case on which the LCS
program was predicated have degraded, remain unproven, and continue to
evolve.[Footnote 15]
Higher Than Expected Costs and Longer Than Expected Schedules:
LCS has ended up being more costly and taking longer to field than
initially planned. LCS was intended to be an affordable ship at $220
million per seaframe. But, due to cost growth and schedule delays on
which we have previously reported, LCS will be more expensive than
originally planned.[Footnote 16] Congress increased the cost cap
established for the program twice, first to $460 million and then to
$480 million per ship.[Footnote 17] The Navy also wanted to accelerate
the process of moving from design to fielding of LCS as opposed to
prior ships. In the 2004 LCS capability development document, the Navy
expected an initial operational capability to be fielded in 2007, 3
years after program initiation. According to the Navy, the LCS
achieved initial operational capability in 2013, 9 years after program
initiation, with the deployment of LCS 1 to Singapore with an
installed mission package.[Footnote 18]
Lower Expectations about the System's Capabilities:
Navy expectations of LCS capability have weakened over time. We
analyzed several iterations of validated LCS requirements documents on
which the program was initially justified, as well as various system
descriptions from program office documentation and several iterations
of the two LCS CONOPS documents.[Footnote 19] We found that
descriptions of how capable LCS will be and how it will be
operationally employed have changed over time. Expected capabilities
have lessened from optimistic, early assumptions of high levels to
more tempered and reserved assumptions in recent documentation. While
more explicit examples of specific capabilities that changed are
classified, table 4 depicts some of the more significant unclassified
examples of the changes in Navy statements about LCS's capability from
early in the program to today.
Table 4: Evolution of Navy Statements about Littoral Combat Ship (LCS)
Capability:
Concept: LCS's capability against adversaries;
Early (2004-2008): Primarily developed for use in major combat
operations. Will gain initial entry and provide assured access--or
ability to enter contested spaces--and be employable and sustainable
throughout the battlespace regardless of anti-access or area-denial
environments;
Current (2011-2012): Current LCS weapon systems are under-performing
and offer little chance of survival in a combat scenario. Not to be
employed outside a benign, low-threat environment unless escorted by a
multi-mission combatant providing credible anti-air, anti-surface, and
anti-submarine protection.
Concept: How LCS will deploy;
Early (2004-2008): Will be a self-sufficient combatant;
Current (2011-2012): Lacks the ability to operate independently in
combat. Will have to be well protected by multi-mission combatants.
Multiple LCSs will likely have to operate in a coordinated strike
attack group fashion for mutual support.
Concept: How mission packages swaps will be utilized;
Early (2004-2008): Mission packages will be quickly swapped out in an
expeditionary theater in a matter of days;
Current (2011-2012): Though a mission package can be swapped within 72
hours if all the equipment and personnel are in theater, swapping out
mission packages overseas presents manning and potentially expensive
logistical challenges. An LCS executing a package swap could be
unavailable for between 12-29 days, and it may take 30-60 days or more
for equipment and personnel to arrive in theater.
Source: GAO analysis of Navy documents.
Note: Documents reviewed include LCS capability development documents,
LCS concept of operations, and LCS wargaming reports.
Source: GAO analysis of Navy documents.
Note: Documents reviewed include LCS capability development documents,
LCS concept of operations, and LCS wargaming reports.
[End of table]
Key LCS Concepts Remain Unproven and Continue to Evolve:
Our analysis of LCS documentation has also shown that there are a
number of broad unknowns related to the LCS concepts that remain
unproven and which, until resolved, will make it difficult to
determine if the LCS business case is sound and whether the system can
meet the warfighter needs within available resources. Several of the
key concepts that underpin the program--such as employing modular
weapon systems, highly reduced manning levels, and heavy reliance on
off-ship maintenance and administrative support--represent innovative
approaches that have not been used before by the Navy and have not yet
been validated through operations. The Navy's 2011 warfighting CONOPS
for LCS reflect these unknowns, stating in several places that the
Navy will determine how to employ LCS only once it has gained
operational experience. Navy Fleet Forces officials also told us that
there is not yet any LCS-specific doctrine on how an LCS is to be
operated. Similarly, the operational support-focused platform
wholeness CONOPS state that annual updates are expected because LCS
crewing, training, and support strategies are constantly evolving.
Some of these questions, discussed in table 5, are likely to have
impacts on the ongoing LCS acquisition, including what seaframe
variant should be purchased and how the ships will actually be
operated and supported.
Table 5: Major Littoral Combat Ship (LCS) Conceptual Questions
Regarding Ship Operations and Seaframe Variants:
Conceptual questions: Relative advantages of each seaframe design;
Issue: Because the Navy changed its approach from what was to be a
limited initial purchase of seaframes followed by experimentation to
concurrent acquisition and experimentation, it is currently unknown if
the unique design attributes of each seaframe make one or the other
more suited to specific mission sets and/or theaters of operation. The
Navy acknowledges that the two seaframes are different ship classes
with distinct capabilities and limitations that will affect mission
tasking and deployment. For example, the former Undersecretary of the
Navy and others have posited that the Freedom variant may be better
suited to the Middle East region and the SUW mission given its
maneuverability, while the Independence variant may be better suited to
the western Pacific region and the ASW and MCM missions given its
longer range and larger helicopter deck. The Navy has not yet
determined if it will down-select to one variant or contract for
mission-specific variants.
Conceptual questions: Feasibility of the reduced manning;
Issue: LCS is intended to operate with a crew that is one-fourth to
one-fifth the size of other comparable-sized ships. LCS currently has
a core crew of 40, plus 23 aviation detachment crew and 15-19 mission
package crew. Internal Navy analysis has shown a concern with high
levels of crew fatigue on the LCS due to the higher workload required
to compensate for the fewer crew members. The LCS 1 core crew was
increased to 50 for the Singapore deployment, and the Navy is
considering permanently increasing the core crews to 50 or potentially
more to address crew fatigue and workload concerns. The mission module
crews may also need to be increased as the Navy gains experience using
all three modules.
Conceptual questions: Feasibility and mechanics for the novel shore-
based contractor maintenance approach;
Issue: The Navy is implementing a new maintenance concept for LCS,
whereby it will heavily rely upon shore-based contractor and civilian
personnel to support and maintain the LCS. The seaframe crew itself
will conduct very little preventative maintenance; the Navy envisions
doing this work pierside. This approach will result in more complex
logistics than is usually required for forward deployed ships, since
parts and personnel will have to be forward deployed. This approach is
unproven; data gathered on the LCS 1 Singapore deployment will help
the Navy to determine whether it will be feasible and cost-effective.
If the Navy elects to have the crews conduct more preventative
maintenance onboard, it may require additional crew and seaframe
design changes to accommodate spare parts storage.
Conceptual questions: Mechanics of mission module swaps;
Issue: The Navy has not yet determined where mission modules might be
forward-staged and how frequently they may be swapped out. In addition
to recent wargames demonstrating that these swaps may take longer than
initially planned, there is still deliberation on what types of crew
qualification testing may be necessary after a swap occurs. Additional
qualification testing could in turn require more time after a swap to
get the ship back out to sea.
Source: GAO analysis of Navy documentation.
[End of table]
Changes to any of the above concepts could affect the LCS program and
employment of the ships. For example, if the Navy learns that one
seaframe variant is more useful in certain mission sets or operating
areas than the other, the Navy could down-select to a single design or
change planned seaframe procurement quantities. While the Navy is
currently buying both variants, Navy program officials, as well as the
LCS Council chair, state that all options are under consideration for
the next planned contract award in fiscal year 2016. Similarly, if the
Navy determines that mission package swaps are no longer feasible, the
ratio of mission packages to seaframes that the Navy plans on buying
may need to be reconsidered. Finally, the LCS Council chair told us
LCS performance requirements might change, with potential areas
including reduction in required top speeds and increases in lethality.
Future Acquisition and Operations and Support Costs Are Uncertain:
There is also still significant uncertainty related to the cost of
acquiring, fielding, and operating the LCS because of unknowns about
the future designs of the seaframes and mission modules, and the
Navy's manning and maintenance strategy. While the current blocks of
seaframes are being built under fixed price contracts, any major
changes to the design and/or capabilities of future LCS seaframes and
modules can result in additional research and development funding
being required and increased procurement costs. A down-select
decision--which the Navy has not yet ruled out--would also have
implications on costs for both procurement and operations. Similarly,
if the mission module program continues to add or remove systems the
acquisition costs for the modules may also change. In addition, as
with other major weapon systems programs, operating and support (O&S)
costs represent the primary life-cycle cost driver for the LCS
program. Table 6 depicts several areas of uncertainty that could
affect LCS O&S costs.
Table 6: Potential Areas of Littoral Combat Ship (LCS) Operating and
Support Cost Uncertainty:
Reasons for cost uncertainty: Evolving support plans;
Issue: DOD has not yet approved a revised version of the Navy's LCS
Life Cycle Sustainment Plan. This plan is a summary of the LCS
sustainment strategy being developed by the LCS seaframes program
office, and it includes discussion about how the LCS will address
issues including shore support; replenishment and refueling;
maintenance; and training. Changes to any of these areas which the
Navy states may be an outcome of experimentation could impact
operating and support costs.
Reasons for cost uncertainty: Evolving manning levels;
Issue: The manpower concept for LCS is a departure from traditional
Navy operations. For example, LCS will be the first ship to use such a
degree of minimal manning, and one of the first surface combatants to
use a rotational crew concept.[A] The Navy has not yet finalized the
manning for the different LCS variants and mission modules, and
assumptions are still changing. In advance of deployment of LCS 1 to
Singapore the Navy added 20 berths to LCS 1 and 10 additional billets
to the ship. Manning is the most significant life cycle cost driver for
ships.
Reasons for cost uncertainty: Heavy reliance on contractor-based
maintenance;
Issue: Instead of having the ship's crew perform most preventative
maintenance while underway like other ship classes, LCS will return to
port periodically for contractor-led maintenance periods. The ship
will be unable to conduct most forms of preventative and corrective
maintenance at sea, including basic activities like corrosion removal
and painting, and will not have many spare parts on board or crew
tasked to conducting repairs. For the initial deployments, contractor
maintenance personnel will be flown in from the United States. The
Navy is operating under an Interim Support Plan contract for this
work, but it plans to competitively award a longer-term contract that
more fully reflects its support strategy in 2014. Until these
contracts are negotiated and signed, the exact scope of work to be
performed and the cost of performing it will be unknown. At the same
time, the Navy is evaluating shifting some maintenance back to the
ship's crew, which indicates that its strategy is still evolving.
Adding crew to conduct maintenance would add to O&S costs, though costs
may be offset by reducing reliance on contractors. Further, it is
unknown how mission module sensors and systems will be maintained. Some
of these systems are sealed units containing sensitive electronics, and
the LCS is not envisioned to be equipped with electronics repair
technicians or appropriate parts to conduct repairs. It may be that any
damaged or malfunctioning systems will have to be removed from the ship
and returned to the contractor in the U.S. for repair.
Source: GAO analysis of Navy documentation.
[A] Ballistic missile submarines, mine countermeasures ships, and
coastal patrol craft also use rotational crewing.
[End of table]
At the Milestone B decision for the seaframe program, the Navy
estimated O&S costs to account for 62 percent of the program's life-
cycle cost estimate, or $87 billion of $124 billion in total ownership
costs through fiscal year 2057.[Footnote 20] The Navy's point estimate
for the LCS seaframe program total life-cycle cost estimate was at the
10 percent confidence level, meaning that there is a 90 percent chance
that the costs could be different--and likely higher based on the data-
-than the point estimate. The confidence level is an output of the
statistical risk analysis of the parameters and assumptions used to
build the point estimate. If Navy leadership chose a higher confidence
level, the resulting estimate would have been higher. The uncertainty
reflected by this estimate was largely driven by unknowns in O&S costs
and a lack of actual data about how LCS will operate on which to base
estimates. Over the years, we have reported that many programs overrun
their budgets because original point estimates are unrealistic. While
no specific confidence level is considered a best practice, we have
reported that experts agree that program cost estimates should be
budgeted to at least the 50 percent confidence level, but budgeting to
a higher level (for example, 70 percent to 80 percent, or the mean) is
now common practice.[Footnote 21] The Navy believes that it was likely
budgeted at higher than the 10 percent confidence level with DOD's 5-
year future years defense program, but did not provide a percentage.
Further, it stated that the majority of the estimate is outside of the
future years defense program and has not been budgeted for yet.
[Footnote 22] The Navy's estimate for LCS total life cycle costs
ranges from approximately $108 billion at a 0 percent confidence level
up to approximately $170 billion at a 100 percent confidence level.
[Footnote 23]
As a result of the O&S unknowns, the Navy will not be able to more
accurately estimate LCS O&S costs until after it obtains and analyzes
operational data obtained over the course of several deployments of
both variants and after it finalizes its LCS manning and maintenance
strategies.[Footnote 24] As data continues to be gathered and more
seaframes are deployed the quality of the data will continue to
improve. Though the Navy provided estimates for LCS-specific support
concepts, it has little or prior experience with these concepts on
which to build accurate estimates. Navy cost estimators told us that
the initial LCS O&S estimates were derived from O&S costs for other
Navy surface combatants like the Arleigh Burke class destroyers and
the Oliver Hazard Perry class frigates which were then adjusted for
LCS specific concepts such as crew size, maintenance and training and
other O&S activities. However, they also told us that until some of
these concepts are refined and actual data is obtained, it will be
difficult to establish a more reliable estimate.
Production of Seaframes and Modules Is Proceeding without Key
Knowledge about LCS Capabilities:
The Navy plans to make significant investments in seaframes and
mission modules before completing testing designed to demonstrate
whether the integrated ship can perform its intended missions. In
addition to awarding contracts for almost half of the entire planned
number of seaframes ahead of testing results, the Navy plans to
procure more than half of the SUW and MCM mission packages before it
demonstrates they meet LCS's minimum performance requirements for
their respective missions. Specifically, by 2010, the Navy had awarded
contracts for 24 of the 52 planned seaframes, and it plans to award
additional contracts in 2016, 3 years before it completes operational
testing needed to prove the performance of the integrated seaframes
and fully capable mission modules.[Footnote 25]
As discussed above, when the Navy awarded the contracts for the first
24 seaframes, neither of the two variants had completed developmental
testing, and based on the current schedule, operational testing of the
integrated capability (seaframes with mission packages) will not be
completed until 3 years after the next planned contract award. The
Navy does not expect to complete developmental testing for both
variants until 2015, survivability testing until 2015, and full ship
shock trials until 2016. Results of these tests could result in
identification of design deficiencies, and the Navy will have limited
time to act on this knowledge prior to awarding its next block buy
contracts for seaframes, currently scheduled for fiscal year 2016.
Further, the Navy expects to procure at least 31 of the 64 planned
mission packages while concurrently conducting developmental and
operational tests on LCS 2 and LCS 3. Operational testing is currently
projected to be completed in 2019, 3 years after the Navy plans to
award its next seaframe contracts. This testing will represent the
first time that the capability of the seaframes--equipped with mission
packages that meet the threshold requirements defined in the
capability development document--will be fully demonstrated in an
operational environment.
The LCS will execute its operational testing in phases. Each planned
increment of capability for each mission package will be tested on
both seaframes. Operational testing will be considered complete when
the final increments of all the modules have been tested on each
seaframe. Based on the current acquisition strategy, the Navy will
have bought 24 seaframes, 9 SUW mission packages, and 7 MCM mission
packages when the first phase of operational testing begins in fiscal
year 2014. This approach puts the Navy at risk of acquiring a large
number of seaframes with limited capability or having to retrofit a
large number of systems if problems are discovered in testing. DOT&E
has also noted that operational testing planned for fiscal year 2014
may not be successfully completed or may be delayed because of
performance problems identified during developmental testing. Any
delays to even these early operational test events will further limit
the information the Navy has to support its ongoing acquisition
decisions, and increases risks that the Navy will buy systems that
cannot meet requirements.
Table 7 shows the Navy's planned seaframe contract activities and
actual and planned purchases, mission package procurements, and
operational test dates.
Table 7: Planned Seaframe Contract Activities, Mission Package
Procurement, and Operational Testing of Mission Package Increments on
Each Variant:
Seaframe contract activities;
Fiscal year 2012: [Empty];
Fiscal year 2013: [Empty];
Fiscal year 2014: [Empty];
Fiscal year 2015: Solicit proposals and source selection for second
block buy;
Fiscal year 2016: Second block buy contract award;
Fiscal year 2017: [Empty];
Fiscal year 2018: [Empty];
Fiscal year 2019: [Empty].
Cumulative seaframes funded[A]:
Fiscal year 2012: 12;
Fiscal year 2013: 16;
Fiscal year 2014: 20;
Fiscal year 2015: 24;
Fiscal year 2016: 26;
Fiscal year 2017: 28;
Fiscal year 2018: 30;
Fiscal year 2019: 33.
Cumulative mission modules procured[B]:
Fiscal year 2012: SUW (24 planned);
Fiscal year 2013: 4;
Fiscal year 2014: 7;
Fiscal year 2015: 9;
Fiscal year 2016: 11;
Fiscal year 2017: 13;
Fiscal year 2018: 13;
Fiscal year 2019: 15.
Cumulative mission modules procured[B]:
Fiscal year 2012: MCM (24 planned);
Fiscal year 2013: 4;
Fiscal year 2014: 6;
Fiscal year 2015: 7;
Fiscal year 2016: 9;
Fiscal year 2017: 11;
Fiscal year 2018: 13;
Fiscal year 2019: TBD.
Cumulative mission modules procured[B]:
Fiscal year 2012: ASW (16 planned);
Fiscal year 2013: 0;
Fiscal year 2014: 0;
Fiscal year 2015: 1;
Fiscal year 2016: 1;
Fiscal year 2017: 3;
Fiscal year 2018: 3;
Fiscal year 2019: TBD.
Freedom variant operational testing:
Fiscal year 2012: [Empty];
Fiscal year 2013: [Empty];
Fiscal year 2014: SUW Inc I; SUW Inc II;
Fiscal year 2015: [Empty];
Fiscal year 2016: MCM Inc I; MCM Inc II; ASW;
Fiscal year 2017: MCM Inc III;
Fiscal year 2018: MCM Inc IV;
Fiscal year 2019: SUW Inc III; SUW Inc IV.
Independence variant operational testing:
Fiscal year 2012: [Empty];
Fiscal year 2013: [Empty];
Fiscal year 2014: [Empty];
Fiscal year 2015: SUW Inc I; SUW Inc II; MCM Inc I;
Fiscal year 2016: MCM Inc II; MCM Inc III;
Fiscal year 2017: MCM Inc IV; ASW;
Fiscal year 2018: [Empty];
Fiscal year 2019: SUW Inc III; SUW Inc IV.
Source: GAO analysis of Navy documentation.
[A] Cumulative seaframes funded refers to seaframes for which the Navy
has received or plans to have received the congressional
appropriations. The 24 seaframes purchased, or planned to be
purchased, through fiscal year 2015 are under the previously awarded
contracts.
[B] The Navy has not finalized the acquisition strategy for the mission
modules after fiscal year 2017.
[End of table]
We have previously reported that this type of concurrent testing and
production can lead to cost growth and schedule delays on acquisition
programs. For example, we reported in 2012 that most of the Joint
Strike Fighter program's instability was the result of highly
concurrent development, testing, and production activities.[Footnote
26] We also reported that the Missile Defense Agency's decisions to
move into production without verifying performance led to extensive
retrofits, redesigns, delays, and cost increases.[Footnote 27] The
Navy's current acquisition strategy for LCS puts it at similar risk.
The LCS acquisition strategy has led to major acquisition decisions
being made well before key DOD acquisition milestones that provide the
framework for oversight. For example, Milestone B for Navy
shipbuilding programs typically authorizes detailed design and
construction for lead ships. For LCS, the Under Secretary of Defense
for Acquisition, Technology and Logistics (USD AT&L) authorized the
final system design at Milestone A, which typically marks the
initiation of a shipbuilding program's technology development efforts,
and Milestone B was not held until after the Navy had procured nearly
half the planned number of seaframes. Figure 10 depicts the how the
LCS program compares with the typical acquisition framework for
shipbuilding programs.
Figure 10: Acquisition Frameworks for Typical Shipbuilding Programs
and Littoral Combat Ship:
[Refer to PDF for image: illustration]
Littoral Combat Ship:
Program initiation:
Milestone A;
Final system design authorized.
Typical shipbuilding program:
Contract awarded for 1st seaframe;
Contract awarded for 2nd seaframe;
Contract awarded for seaframes 3 and 4;
Contract awarded for seaframes 5 – 24.
Detail design and construction authorized:
Milestone B;
Lead ship construction decision.
Source: GAO analysis of Navy data.
[End of figure]
More recently, USD AT&L rescinded the requirement for the seaframe
program to have a Milestone C review, and also delayed the full-rate
production decision for seaframes from 2015 to 2019 because the Navy
will not be able to meet statutory criteria dependent on the
completion of operational testing until then. Statutes require the
Secretary of Defense to provide that a program complete realistic
survivability testing and initial operational testing before
proceeding beyond low-rate initial production.[Footnote 28] Statute
defines low rate initial production for naval vessel programs, such as
the LCS seaframe program, as production of the minimum quantity that
is feasible while preserving mobilization of the production base. For
the LCS seaframes program, USD AT&L has defined low-rate initial
production as the first 24 seaframes. Unless the Navy changes its
plans, its intention to award contracts for seaframes 25 and beyond in
2016 will exceed the low-rate initial production quantity 3 years
prior to the full-rate production decision and prior to the completion
of operational testing. While DOD acquisition policy does allow for
decision authorities to tailor information requirements and the
acquisition process to achieve cost, schedule, and performance goals,
the Navy's acquisition decisions on the LCS program are significant
because each DOD acquisition milestone has associated criteria that
are supposed to act as internal controls to prevent the premature
commitment of resources before certain knowledge has been attained.
The timing of this next planned seaframe contract award has also led
USD AT&L and DOT&E to question the meaningfulness of the seaframe's
full-rate production decision. Even though the milestone decision has
been delayed, the Navy plans to continue purchasing seaframes, and if
current plans come to fruition the Navy will have over half the
planned seaframes under contract in the program's low-rate initial
production phase.
The Navy has also made procurement decisions and committed resources
to mission module production well in advance of acquisition
milestones, essentially bypassing two major reviews. The Navy has
procured 8 of 64 planned mission packages before Milestone B, which is
when programs are typically authorized to begin system design and
demonstration efforts, or Milestone C, which is when programs are
typically authorized to begin low-rate production.[Footnote 29] Making
procurement decisions prior to these milestones--in essence, while the
mission module program is still in the pre-low rate production phase--
increases program risk because oversight organizations will not have
yet approved key documents, including the acquisition program
baseline, requirements documents, and test and evaluation master plan
required for Milestone B.[Footnote 30] The Navy planned to hold
Milestone B for the mission modules program in fiscal year 2011, but
it has been delayed until at least the third or fourth quarter of
fiscal year 2013 because USD AT&L has not yet approved the acquisition
program baseline. USD AT&L has delayed the decision until the Navy
produces stronger linkages between the mission modules and the
seaframes program and establishes metrics for individual mission
package increments. In the meantime, the Navy continues to procure
additional mission packages. The mission modules program office stated
that the program's milestone decision authority has approved
production of mission packages in order to keep pace with production
of seaframes. In 2012, USD AT&L delegated the responsibility of
milestone decision authority for the mission modules program from his
office to the Secretary of the Navy.
In order to enhance oversight of the LCS seaframes and mission modules
procurements, the USD AT&L has established that the Defense
Acquisition Board--the department's senior-level forum for advising
USD AT&L on critical decisions concerning selected programs--will
conduct annual in-process reviews of the integrated LCS programs
beginning in December 2012 and to be held each September thereafter.
There will also be a Defense Acquisition Board review to coincide with
the release of the request for proposals for seaframes LCS 25 and
beyond. Additionally, USD AT&L has established that the Navy shall
provide metrics to monitor progress in quarterly reports. These
oversight mechanisms should provide USD AT&L opportunities to make
decisions about future LCS procurements, but the information will
ultimately be limited by the amount of operational test data available
at the time.
Conclusions:
The current LCS program is not the program envisioned over a decade
ago. Initial cost estimates have been significantly exceeded; the Navy
has not been able to field the ship or its planned capabilities much
more rapidly than prior programs, as planned; and the supporting
business case continues to evolve--including key unknowns such as how
the ship will be used and manned. Further, the Navy will not be able
to demonstrate that the LCS can meet the threshold capabilities
defined in its requirements documentation with mission packages
integrated with the seaframes until 2019. Until the Navy has
solidified its requirements and concepts for LCS, neither Congress nor
the Navy can be certain that the LCS is the right system to meet the
warfighters' needs. Much is still unknown under the new concept the
Navy has set forth. The Navy has a great deal of learning to do about
the ships, the integrated capability that they are intended to provide
when equipped with the mission packages, and how the overall LCS
concept will be implemented. The deficiencies identified in this
report are not criticisms of progress in the sense that things should
have gone smoother or faster. At issue, rather, is the misalignment of
the program's progress with acquisition decisions, and with key
decisions being made well before requisite knowledge is available.
The apparent disconnect between the LCS acquisition strategy and the
needs of the end user suggests that a pause is needed. The Chief of
Naval Operations, representing the end user (the fleet), has sponsored
several technical studies that raise fundamental questions about
whether the program, as envisioned, will meet the Navy's needs. The
results of additional, ongoing studies which are expected to be
completed over the course of the next year or so may result in changes
to the program. And the chair of the vice admiral-level LCS Council
has stated that all options are on the table for the future of the
program. In the meantime, the acquisition of seaframes and mission
packages continues, and the program office shows no signs of slowing
its next planned set of seaframe contracts. This disconnect between
requirements and acquisitions increases the risk that the Navy is not
wisely spending its resources. The Navy's request for funding for 4
additional seaframes (numbers 17-20) in its fiscal year 2014 budget
request suggests that taxpayer money will be committed to 24 seaframes
before important information is known about how the ship will be used.
Congress is in a position to slow funding for these additional
seaframes, pending the results of the technical studies that are
already underway.
In addition, the Navy's approach of procuring the assets before the
results of testing--which could potentially lead to design changes--is
contrary to acquisition best practices. The work of assessing the
results operational testing of seaframes, mission packages, and the
integrated ship, as well as ensuring that cost estimates are well-
informed and requirements validated, should not be rushed in an effort
to adhere to the current schedule of awarding the next planned
seaframe contract in fiscal year 2016. Doing so could lead to the Navy
risking taxpayer investments of over $40 billion in 2010 dollars in
systems that may not provide the expected--and yet to be fully
defined--militarily useful capability.
Also, the Navy's planned approach of acquiring additional seaframes
prior to a formal DOD full rate production decision limits the ability
of oversight entities, including USD AT&L, DOT&E, and Congress, to be
adequately informed and able to influence the Navy's actions. Equally
important, if the Navy commits to a large quantity of additional
seaframes before incorporating all of the lessons learned from fleet
experimentation, it may end up buying equal quantities of both
seaframes, when one variant may be in fact more suitable than the
other. Likewise, the Navy's continued acquisition of mission packages
that do not meet threshold requirements, and in the absence of a
defined approach to meet these requirements in the future, is not in
accordance with best practices or DOD guidance, and increases the risk
that the Navy could buy a number of mission modules that are not
militarily useful.
The Navy also still has a number of key decisions to make that could
impact the design of the seaframes--such as increasing the level of
manning onboard, adding additional combat capability, and moving
towards ship system commonality--and that could significantly change
cost estimates for the ship. The Navy may also learn via operational
experience that each variant has better suitability to certain mission
sets, which could influence the mix of future ships that it buys. This
knowledge will likely not be attained until after several operational
deployments with both seaframe variants employing all three mission
packages. If the Navy signs contracts for another large block of ships
in 2016 while these major questions remain, it increases the
likelihood of continued design instability and production
inefficiencies, as well as potentially fielding a reduced capability
at a higher cost.
Matters for Congressional Consideration:
1. To ensure that the Navy has adequate knowledge to support moving
forward with future seaframe construction, Congress should consider
restricting future funding to the program for construction of
additional seaframes until the Navy:
* completes the ongoing LCS technical and design studies,
* determines the impacts of making any changes resulting from these
studies on the cost and designs of future LCS seaframes, and:
* reports to Congress on cost-benefit analyses of changes to the
seaframes to change requirements and/or capabilities and to improve
commonality of systems, and the Navy's plan moving forward to improve
commonality.
2. To ensure that information on the relative capabilities of each
seaframe variant is communicated in a timely and complete manner,
Congress should consider requiring DOD to report on the relative
advantages of each variant in carrying out the three primary LCS
missions. This report should be submitted to Congress prior to the
planned full-rate production decision and the award of any additional
seaframe contracts.
Recommendations for Executive Action:
To ensure that, going forward, relevant oversight entities are able to
provide appropriate decision-makers with additional insight into
future contract awards for seaframes, we recommend that the Secretary
of the Defense direct the Secretary of the Navy to take the following
two actions:
1. If the Navy is approved by USD AT&L to award additional seaframe
block buy contracts for LCS 25 and beyond, ensure that it only
procures the minimum quantity and rate of ships required to preserve
the mobilization of the production base until the successful
completion of the full-rate production decision review. The award of
any additional seaframe contracts should be informed by:
* a new independent cost estimate conducted by DOD's Cost Assessment
and Program Evaluation office, and:
* a re-validated capabilities development document.
2. Prior to the full-rate production decision and the award of any
additional seaframe contracts, report to Congress on the relative
advantages of each seaframe variant for each of the three mission
areas.
To facilitate mission module development and ensure that the Navy has
adequate knowledge to support further module purchases, we recommend
that the Secretary of the Defense direct the Secretary of the Navy to
take the following two actions:
3. Ensure that the Acquisition Program Baseline submitted for the
mission modules Milestone B establishes program goals--thresholds and
objectives--for cost, schedule, and performance for each increment per
current DOD acquisition policy.
4. To ensure that the purchase of mission modules do not outpace key
milestones, buy only the minimum quantities of mission module systems
required to support operational testing.
Agency Comments and Our Evaluation:
We provided a draft of this report to DOD for review and comment. In
its written comments, which are included in appendix II, DOD non-
concurred with two recommendations, partially concurred with one, and
concurred with one. We also provided relevant portions of the draft
report to the shipbuilders and several contractors developing mission
module technologies, and incorporated their technical comments as
appropriate.
DOD non-concurred with the bulk of our first recommendation,
pertaining to the quantity and rate of ships to be purchased under the
contracts for LCS 25 and beyond. DOD stated that unnecessarily
reducing production to a minimum sustaining rate would cause the price
to the government to increase, with no value added to the program.
While pricing of the individual seaframes is important, we believe
there is greater risk in awarding additional seaframe contracts before
key knowledge is gained about the LCS's integrated capabilities and
how the ship will be operated. As we note in our report, when the Navy
plans to award the next seaframe contracts, in fiscal year 2016, it
will not have the benefit of this important knowledge, as operational
testing is scheduled for completion in fiscal year 2019. DOD also
stated that no major design changes are planned to the seaframes. But
we found that there is, in fact, potential for such changes. As we
note in our report, a number of ongoing technical and design studies,
as well as the Navy's plans to move to a common combat management
system and to increase the manning on the ships, are likely to require
design changes. DOD agreed with the portion of our recommendation
related to the need for an independent cost estimate to inform the
planned 2019 full-rate production decision. Regarding the portion of
the recommendation related to the need for a re-validation of the
capabilities development document, DOD stated that the Joint Staff,
along with the Navy, will conduct a requirements assessment study. It
is not clear from DOD's response, however, whether this study will
meet the intent of our recommendation, which is to ensure that the
level of capability provided by LCS is militarily useful given the
warfighter's current capability needs and that continued investment in
the program is warranted. We continue to believe that a more formal
revalidation of the capabilities development document, through the
Joint Requirements Oversight Council, would achieve this goal.
DOD stated that it concurred with our second recommendation, regarding
a report to Congress on the relative advantages of each seaframe
variant for each of the three mission areas prior to the award of any
additional seaframe contracts. However, DOD's response does not
directly address our recommendation. DOD stated that the Navy can, if
requested by Congress, provide a report on the performance of each
seaframe variant and mission modules against current LCS requirements.
While this may provide useful information, it would not address the
relative advantages of the variants in performing the three primary
LCS missions as we recommended. As noted in our report, Navy officials
have stated that one variant may be better suited to certain missions
or tasks than the other. We would expect DOD's report to Congress to
contain this type of information to ensure that Congress is fully
aware of the advantages and disadvantages of each seaframe variant and
how these might influence future procurements. To help ensure that
Congress is informed of the relative advantages of each variant prior
to key upcoming decisions about future procurements, we added a second
Matter for Congressional Consideration to this report.
DOD partially concurred with our third recommendation, regarding the
establishment of cost, schedule, and performance goals for each
mission module increment. DOD responded that the mission module
program's Acquisition Program Baseline will include cost, schedule,
and performance thresholds and objectives, but stated that the entire
program consists of a single increment. This statement is inconsistent
with how DOD defines performance requirements and how it plans to
conduct operational testing for the mission modules program, both of
which reflect individual increments. In addition, as discussed in our
report, current DOD acquisition policy defines each increment of a
capability, such as a weapon system, as a "militarily useful and
supportable operational capability." Defining cost, schedule, and
performance thresholds and objectives for each mission package
increment would provide DOD and the Navy with information needed to
effectively monitor the development of the increments and a baseline
against which to measure performance.
DOD did not concur with our fourth recommendation, that the Navy buy
only the minimum quantities of mission module systems required to
support operational testing. DOD stated that the Navy must procure
mission packages at a rate necessary to support (1) developmental and
operational testing of the two seaframe variants with each mission
module increment, (2) fleet training needs, and (3) operational LCS
ships. The purpose of our recommendation is to facilitate mission
module development and, at the same time, ensure that the Navy has
adequate knowledge before it purchases additional modules to
operationally deploy on LCS ships. Further, DOD's comments did not
address the primary rationale for our recommendation--that the Navy is
buying mission modules before it has met key acquisition policy and
testing requirements and acquired the knowledge needed to validate
that they work as intended. Instead, the pace of mission module
procurements is based, in part, on the need to equip LCS ships
currently under construction; that is, well before the ships would be
available to be outfitted with module capabilities. As our
recommendations point out, the way to mitigate the acquisition risks
for the LCS program is not to maintain or speed up the current pace of
procurements, but rather to adjust procurement plans to better align
with the timing of operational test data availability.
The Navy also provided technical comments, which we incorporated as
appropriate. The Navy also made three main points in these comments.
First, the Navy stated that its experience in operating the LCS--over
100,000 nautical miles steamed on LCS 1 and 2 together--and conducting
test events to date has provided enough information to give the Navy
confidence that it understands the performance of the LCS and the
program's potential risks. However, much of the experience the Navy
has gained with LCS has been either with just a seaframe, or with
partial or developmental versions of mission modules--not with
complete, integrated, and capable mission packages. We do not believe
that these activities are a substitute for or provide the same
knowledge about LCS capabilities as operational testing. The Navy also
disagreed with our characterization of the LCS business case as
"degraded," stating that the program still meets the requirements
defined in its capability development document. While this is true,
several key assumptions about how the LCS would operate--that formed
the initial business case--have changed. As we note in the report, the
Navy's own internal assessments of LCS capabilities support this
conclusion. Finally, the Navy stated that the initial increments of
the mission packages are based on mature technologies and will provide
a level of performance that exceeds the Navy's current capabilities
and that subsequent increments will largely fill today's gaps in
warfighting capability. As our report states, the Navy is still
addressing development challenges with initial mission package
increments, and their performance has not been validated in
operational testing. The exact capabilities of subsequent increments
is unclear because the Navy has not defined performance requirements
for each increment or provided a roadmap for how they will meet LCS
capability needs.
As agreed with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 3 days
from the report date. At that time, we will send copies to appropriate
congressional committees, and the Secretary of Defense and the
Secretary of the Navy. In addition, the report is available at no
charge on the GAO website at [hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at 202-512-4841 or mackinm@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff who made key contributions to
this report are listed in appendix IV.
Signed by:
Michele Mackin:
Director, Acquisition and Sourcing Management:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
To assess the Navy's progress in producing and testing the seaframes,
we analyzed Navy and contractor documentation including design reports
and construction progress briefings that addressed performance. To
identify design changes and to understand the impact of these changes
to the construction processes for seaframes, we reviewed Littoral
Combat Ship (LCS) contracts and change orders; master planning
schedules for LCS 3 through LCS 8; Supervisor of Shipbuilding reports;
reports to Congress; and Board of Inspection and Survey reports. We
also reviewed information from contractors outlining process
improvements and capital investments at each of the LCS shipyards
aimed at increasing capability and capacity needed to support
efficient construction of LCS seaframes. To evaluate testing and
system suitability and survivability, we reviewed test reports and
test progress briefings. Further, we conducted interviews with
relevant Navy and industry officials responsible for managing the
design and construction of LCS seaframes, such as the LCS seaframe
program office; LCS Program Executive Office; Supervisor of
Shipbuilding; American Bureau of Shipbuilding; Lockheed Martin,
General Dynamics, and Austal USA (LCS prime contractors); and
Marinette Marine and Austal USA (LCS shipbuilders). We also held
discussions with LCS technical authorities, testing agents, and
requirements officers from Naval Sea Systems Command; Board of
Inspection and Survey; Director, Operational Test and Evaluation; and
Commander, Navy Operational Test and Evaluation Force. We also met
with officials from Cost Assessment and Program Evaluation, including
the deputy directors. To observe some of the identified deficiencies
and corrections on the LCS seaframes, we visited and toured LCS 1, LCS
2, and LCS 3. To understand how LCS was being integrated into the
fleet, we met with officials from LCS Squadron One; Fleet Forces
Command; and Third, Fourth, Fifth, and Seventh Fleets.
To assess the Navy's progress developing, producing, and testing the
mission modules, we reviewed documents that outline LCS mission module
plans and performance, including program schedules; LCS requirements
documentation; classified mission module analyses; and recent test
reports for surface warfare (SUW) and mine countermeasures (MCM)
systems. We held discussions with Navy program offices; and with key
contractors for the mission module systems that comprise Increment I
of the MCM mission package and the contractor developing the Griffin
missile, and saw examples of systems from these modules. We also met
with officials from the office of the Director, Operational Test and
Evaluation; Navy's Commander of Operational Test and Evaluation Force;
Naval Undersea Warfare Center; Naval Surface Warfare Center; Naval
Mine and Anti-Submarine Warfare Command; and Navy Space and Naval
Warfare Systems Command.
To evaluate the Navy's business case for the LCS program and risks in
the Navy's acquisition strategy, we reviewed documents on the cost,
capabilities, and potential use of the LCS. This included
documentation related to LCS requirements, threats, and capability
gaps, as well as the LCS Warfighting and Platform Wholeness concept of
operations. We also analyzed warfighting and sustainment wargame
reports; the Board of Inspection and Survey's "LCS Material Condition
and Maintainability" report; and the office of the Chief of Naval
Operations' "Review of the Navy's Readiness to Receive, Employ and
Deploy the LCS Class Vessel" report. We reviewed LCS cost estimates,
including the seaframes independent cost estimate, and program
lifecycle cost estimates for seaframes and mission modules. To
understand the level of unknowns and potential changes with the
program, we met with officials from the LCS Council including the
Director of Navy Staff, and reviewed the LCS Program of Actions and
Milestones document. To understand the conceptual underpinnings of the
LCS program, we met with officials from the Naval War College and the
Naval Warfare Development Command. To understand the role of the fleet
in defining the LCS concept and their participation in the LCS
wargames, we met with officials from LCS Squadron One; Fleet Forces
Command; and the officials from the Third, Fourth, Fifth, and Seventh
Fleets.
To assess the Navy's acquisition strategy for the integrated LCS
program, we reviewed LCS acquisition strategies from 2007, 2008 and
2010; acquisition decision memos; program briefings; Navy reports to
Congress; acquisition program baselines; test and production
schedules; and contracts for both seaframe variants. We also reviewed
relevant sections of Title 10 of the U.S. Code and the Department of
Defense's acquisition policy for acquisition programs, and compared
these guidelines to the Navy's approach for acquiring the LCS.
Additionally, we interviewed officials from the Office of the
Secretary of Defense, including the Under Secretary of Defense for
Acquisition, Technology and Logistics and the Director, Operational
Test and Evaluation; the Joint Staff; and the Navy, including the
seaframes and mission modules program offices; the LCS resource
sponsor in the Office of the Chief of Naval Operations; and the
Director of Navy Staff. Using this information, we identified how the
LCS acquisition strategy changed over time, and assessed how these
changes affected the alignment between the LCS programs' key test
events, such as initial operational test and evaluation; program
reviews, such as the full rate production decision; and investment
decisions, particularly contract awards. Finally, we leveraged
previous GAO reporting on the LCS dating back to 2005 to provide
historical context for these changes, and more recent GAO reports
identifying challenges resulting from concurrent testing and
production activities.
We conducted this performance audit from April 2012 to July 2013 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
[End of section]
Appendix II: Comments from the Department of Defense:
The Under Secretary of Defense:
Acquisition, Technology and Logistics:
3010 Defense Pentagon:
Washington, DC 20301-3010:
July 10, 2013:
Ms. Michele Mackin:
Director:
Acquisition and Sourcing Management:
U.S. Government Accountability Office:
441 G Street, N.W.
Washington, DC 20548:
Dear Ms. Mackin:
This is the Department of Defense response to the Government
Accountability Office (GAO) Draft Report, GA0-13-530, "Navy
Shipbuilding: Significant Investments in the Littoral Combat Ship
Continue Amid Substantial Unknowns about Capabilities, Use, and Cost,"
dated May 28, 2013 (GAO Code 121050). The Department acknowledges
receipt of the draft report.
As more fully explained in the enclosure, the Department non-concurs
with recommendations 1 and 4. The Department concurs with
recommendation 2. The Department partially concurs with recommendation
3.
The Department appreciates the opportunity to comment on the draft
report. For further questions concerning this report, please contact
Mr. Jack Evans, Deputy Director for Naval Warfare, at
John.Evans@osd.mil or 703-614-3170.
Sincerely,
Signed by:
Frank Kendall:
Enclosure: As stated:
GAO Draft Report Dated May 28, 2013:
GAO-13-530 (GAO Code 121050):
"Navy Shipbuilding: Significant Investments In The Littoral Combat
Ship Continue Amid Substantial Unknowns About Capabilities, Use, And
Cost"
Department Of Defense Comments To The GAO Recommendations:
Navy Statement on the Littoral Combat Ship Program:
The Littoral Combat Ship (LCS) program comprises two variants of
seaframe and multiple modular mission packages, each employing
incremental fielding strategies. The two seaframe designs (commonly
referred to by the respective lead ship names, Freedom and
Independence) each meet the requirements established within the
program's Capability Development Document. Further, through innovative
design concepts introduced through the program's non-traditional
acquisition strategy, the performance characteristics of the two
designs provide distinctly unique capabilities of value to the fleet.
Through the construction and lessons learned associated with the first
of class, each has achieved the degree of stability and maturity
necessary to ensure efficient production of follow ships. Perhaps most
importantly, by virtue of sustaining two production lines, the Navy
has successfully employed competition in this program to such extent
that the unit cost in production is on a marked steady decline. At
roughly one-third the unit cost of our large surface combatant
program, the competitive dual sourcing strategy for LCS has provided
the Navy with a viable approach to affordably increasing our force
while also addressing warfighting gaps.
The modular strategy for mission systems is a breakthrough concept for
delivering cost effective capability by employing mature technologies
to meet today's warfighting requirements while also providing
tremendous flexibility to rapidly employ developing technologies to
counter emerging threats or otherwise close gaps today, and in the
future. The Navy has initially selected three mission modules for the
LCS program: Mine Countermeasures, Anti-Surface Warfare, and Anti-
Submarine Warfare. In order to deliver these capabilities in the
capacity needed, and with an eye on controlling cost and risk, the
Navy is employing an incremental fielding strategy wherein the first
increment leverages mature technologies and existing programs of
record to provide a level of performance exceeding that available in
the fleet today. Subsequent increments will further augment this
capability and capacity by introducing developing technologies and
systems which will largely fill gaps in today's warfighting
capabilities. It is the Navy's intent to deploy both Freedom and
Independence variants with Increment 1 mission modules when each ship
of the LCS program is ready to deploy. Later deploying ships will be
equipped with subsequent mission module increments as their respective
developing technologies are fielded.
Department of Defense Responses to Specific GAO Recommendations:
Recommendation 1: To ensure that, going forward, relevant oversight
entities are able to influence the acquisition strategy for future
seaframe contract awards, GAO recommends that the Secretary of Defense
direct the Secretary of the Navy to take the following action:
If the Navy is approved by USD AT&L to award additional seaframe block
buy contracts for LCS 25 and beyond, ensure that it only procures the
minimum quantity and rate of ships required.to preserve the
mobilization of the production base until the successful completion of
the full-rate production decision review. The award of any additional
seaframe contracts should be informed by:
i. A new independent cost estimate conducted by the OSD Cost Analysis
and Program Evaluation office, and;
ii. A re-validated capabilities definition document.
DoD Response: Non-Concur. The Department disagrees that the number of
seaframes procured beginning with LCS 25 should be based solely on the
minimum quantity and rate of ships required to preserve the
mobilization of the production base until the successful completion of
the full-rate production decision review. The Navy plans to procure
LCS seaframes in accordance with the most recent long-range
shipbuilding plan while balancing available funding with achieving the
lowest possible pricing to the Government. Both LCS seaframe designs
are stable and production processes at the two shipbuilders are being
tuned to support the planned production rates. No major design changes
are planned for either seaframe design beginning with the
FY 2016 procurement, after the current block buys end in FY 2015.
Unnecessarily reducing production to a minimum sustaining rate would
only cause the price to the Government to increase with no value added
to the program. The Department recognizes the unique situation of the
LCS program relative to the defense acquisition system and is
appropriately tailoring its decision-making milestones to suit. The
Department will inform acquisition decisions with an up-to-date
Service Cost Position and "should cost" assessment. The Defense
Acquisition Executive will request a new OSD Cost Analysis and Program
Evaluation Independent Cost Estimate to inform the decision.
Additionally, the contract awards in FY 2016 will be informed by
actual cost returns, not estimates, for eight delivered ships and an
additional 16 ships under contract, but not delivered by
FY 2016. The Defense Acquisition Executive will take into account the
progress of the mission modules prior to approving additional LCS
production. Finally, the Joint Staff; along with the Navy staff; will
conduct a requirements assessment study which will serve as a
revalidation of the LCS capabilities definition document. For
reference purposes this recommendation will be identified as item GAO-
13-530-01.
Recommendation 2: To ensure that, going forward, relevant oversight
entities are able to influence the acquisition strategy for future
seaframe contract awards, GAO recommends that the Secretary of Defense
direct the Secretary of the Navy to take the following action:
Prior to the full-rate production decision and the award of any
additional seaframe contracts, report to Congress on the relative
advantages of each seaframe variant for each of the three mission
areas.
DoD Response: Concur. Both seaframe variants are designed to meet the
Capabilities Development Document specified requirements and support
all three types of mission packages. Each variant is built to be
compliant with the LCS Interface Control Document (ICD), which governs
the interface between the ship and any current or future Mission
Module. Future contract awards will be predicated on meeting seaframe
requirements, including the requirement to embark any ICD compliant
Mission Module, in the most cost-effective way. As the Navy prepares
for the next procurement of ships, developmental and operational
testing of the capabilities of each seaframe variant and associated
mission modules is being conducted and the results will be used to
inform future program decisions. The Defense Acquisition Board,
chaired by USD(AT&L), will review the next seaframe procurement prior
to Request for Proposal release. In conjunction with this process, the
Navy can, if requested by Congress, provide a report on the
performance of each seaframe variant and mission modules against the
Capability Development Document (CDD) requirements. For reference
purposes this recommendation will be identified as item GAO-13-530-02.
Recommendation 3: To facilitate mission module development and ensure
that the Navy has adequate knowledge to support further module
purchases, GAO recommends that the Secretary of Defense direct the
Secretary of the Navy to take the following action:
Ensure that the Acquisition Program Baseline submitted for the mission
modules Milestone B establishes program goals—thresholds and
objectives—for cost, schedule, and performance for each increment as
per DOD acquisition policy.
DoD Response: Partially Concur. The entire program, as defined by the
Joint Requirements Oversight Council-approved LCS Flight 0+ CDD,
consists of a single increment for the purposes of DoD 5000.02. The
nine mission package "increments" (4 MCM, 4 SUW, 1 ASW) represent time-
phased fielding of capability. The major systems that comprise mission
packages are established as individual programs, with their own
Acquisition Program Baselines (APBs) including cost, schedule, and
performance objectives and thresholds. One APB for the entire mission
modules program, which integrates these programs for LCS, is
appropriate and compliant with law, regulation, and policy. The APB
will include well-defined, quantitative cost, schedule, and
performance thresholds and objectives for the mission modules. This is
similar to the approach used for other programs which provide time-
phased capability for platforms. The time-phased fielding of
capability and the associated performance metrics to conduct testing
against will be defined in the Capability Production Documents
currently under development for each mission package. For reference
purposes this recommendation will be identified as item GAO-13-530-03.
Recommendation 4: To facilitate mission module development and ensure
that the Navy has adequate knowledge to support further module
purchases, GAO recommends that the Secretary of the Defense direct the
Secretary of the Navy to take the following action:
To ensure that the mission modules do not outpace key milestones, buy
only the minimum quantities of mission module systems required to
support operational testing.
DoD Response: Non-Concur. The Department agrees that LCS mission
module procurements should not outpace delivery of the LCS seaframes.
To keep pace with the LCS seaframes currently under contract or
remaining under the current block buy through FY 2015, the Navy must
procure mission packages at a rate necessary to support: 1)
developmental and initial operational test and evaluation of the two
LCS variants; 2) developmental and operational testing of each
incremental mission module capability as it is integrated and fielded;
3) Fleet training needs; and 4) operational LCS units with the
tailored capabilities required for ship deployments. The Navy
conducted a Quick Reaction Assessment prior to the deployment of USS
FREEDOM (LCS 1) and plans to conduct Initial Operational Test and
Evaluation of mission modules in ships, in accordance with the
approved CDD, prior to operational deployment of those capabilities.
For reference purposes this recommendation will be identified as item
GAG-13-530-04.
[End of section]
Appendix III: Mission Package Overview Illustrations from Interactive
Figures:
This appendix includes the overview graphics from interactive figure
7, figure 8, and figure 9.
Figure 11: Mine Countermeasures Package Overview:
[Refer to PDF for image: illustration]
Depicted:
MH-60S helicopter: Airborne Mine Neutralization System;
MH-60S helicopter: Airborne Laser Mine Detection System;
MQ-8B Fire Scout Unmanned Aerial Vehicle;
Remote Minehunting System;
Unmanned Surface Vehicle with Unmanned Surface Sweep System;
Knifefish.
Mine threats:
Near Surface mines (0’ to 30’ from surface);
In Volume mines (30’ from surface to 150’ from bottom);
Close-tethered mines (30’ to 150’ from bottom);
Close-close tethered mines (less than 30’ from bottom);
Bottom and buried mines.
Source: GAO analysis of Navy data.
Note: Figure represents full capability, not Increment I.
[End of figure]
Figure 12: Surface Warfare Package Overview:
[Refer to PDF for image: illustration]
Depicted:
MH-60R Helicopter;
MQ-8B Fire Scout Unmanned Aerial Vehicle;
Littoral Combat Ship: Maritime Security Module (on board).
Littoral Combat Ship: Approximate ranges:
30 millimeter gun: 2.3 nautical miles;
Griffin IIB missile: 2.6 nautical miles;
57 millimeter gun: 3.5 nautical miles;
Surface-to-surface missile: 21 nautical miles.
Source: U.S. Navy.
Note: Figure represents full capability, not Increment I.
[End of figure]
Figure 13: Anti-Submarine Warfare Package Overview:
[Refer to PDF for image: illustration]
Depicted:
MQ-8B Fire Scout Unmanned Aerial Vehicle;
MH-60R helicopter;
Light weight tow;
Multi function towed array;
Variable depth sonar;
MK 54 torpedo;
Sonobuoys.
Source: U.S. Navy.
[End of figure]
[End of section]
Appendix IV: GAO Contact and Staff Acknowledgments:
GAO Contact:
Michele Mackin, 202-512-4841 or mackinm@gao.gov:
Staff Acknowledgments:
In addition to the contact name above, the following staff members
made key contributions to this report: Ron Schwenn (Assistant
Director); Diana Moldafsky (Assistant Director); Jessica Drucker;
Kristine Hassinger; Amber Keyser; C. James Madar; W. Kendal Roberts;
Roxanna Sun; Robert Swierczek; Molly Traci; Hai Tran; and Nathan
Tranquilli.
[End of section]
Footnotes:
[1] For LCS 2 and LCS 4, General Dynamics was the prime contractor for
the Austal USA-built ships. General Dynamics and Austal USA ended
their teaming arrangement in 2010. Austal USA is the prime contractor
for the 10 other even-numbered seaframes currently under contract.
[2] A trimaran is a ship that has three separate hulls. The Navy is
now referring to the Independence-class variant as a slender
stabilized monohull design.
[3] In the situation that funds are not available in any given fiscal
year for the ships planned for that year, and the parties renegotiate
the prices and delivery schedules for those ships and any additional
ships covered by the block buy contracts that have not yet started
construction, it does not constitute a termination for the convenience
of the government and, thus, the government would not pay termination
costs.
[4] The LCS block buy contracts include fixed-price incentive line
items for seaframe construction. Fixed-price incentive contracts
include a target cost and a target profit, which together equal the
target price. The block buy contracts also specify an incentive ratio
for sharing any savings in the event of underruns when the actual
contract cost is less than the target cost, or the sharing of
additional costs when the actual contract cost is greater than this
target cost. Under the LCS block buy contracts, the Navy's share of
any cost savings or cost overrun is 50 percent and the shipbuilder's
share is 50 percent. This cost sharing arrangement ends when the
actual contract cost reaches the contract ceiling price, at which
point the contractor is responsible for all additional costs. However,
if the Navy is responsible for the cost overruns, it may be
responsible for the costs associated with an increase in the contract
ceiling price.
[5] Board of Inspection and Survey, LCS Material Condition and
Maintainability Report (July 13, 2012) and Office of the Chief of
Naval Operations Review of the Navy's Readiness to Receive, Employ and
Deploy the LCS Class Vessel, (March 9, 2012).
[6] This change also adds the commander of the Military Sealift
Command to the Council leadership. Military Sealift Command will
operate the Joint High Speed Vessel.
[7] 10 U.S.C. §§ 2399, 2366.
[8] Additional problems include the recent reports of a fire occurring
on LCS 4 during the shipbuilder's initial sea trials and issues with
water in the lube oil system on LCS 1. See also GAO, Navy's Ability to
Overcome Challenges Facing the Littoral Combat Ship Will Determine
Eventual Capabilities, [hyperlink,
http://www.gao.gov/products/GAO-10-523] (Washington, D.C.: Aug. 31,
2010).
[9] GAO, Defense Acquisitions: Realistic Business Cases Needed to
Execute Navy Shipbuilding Programs, [hyperlink,
http://www.gao.gov/products/GAO-07-943T] (Washington, D.C.: July 24,
2007). Section 125 of the National Defense Authorization Act for
Fiscal Year 2008 set a unit procurement cost cap of $460 million per
ship for all LCSs procured in fiscal year 2008 and beyond. Pub. L. No.
110-181. Implementation of the cost cap was deferred two years, to
apply to all LCSs procured in fiscal year 2010 and beyond by section
122 of the Duncan Hunter National Defense Authorization Act for Fiscal
Year 2009. Pub. L. No. 110-117. The cost cap was amended by section
121(c) and (d) of the National Defense Authorization Act for Fiscal
Year 2010 to $480 million per ship. Pub. L. No. 111-84.
[10] The American Bureau of Shipping is a ship classification society
that provides independent technical assessments to ensure vessels are
built to an established set of technical criteria.
[11] GAO, Best Practices: High Levels of Knowledge at Key Points
Differentiate Commercial Shipbuilding from Navy Shipbuilding,
[hyperlink, http://www.gao.gov/products/GAO-09-322] (Washington, D.C.:
May 13, 2009).
[12] Section 128(a) of the National Defense Authorization Act for
Fiscal Year 2013 directed GAO to review the Navy's compliance with
federal regulations in accepting LCS 1 and 2. Pub. L. No. 112-239. We
will issue a separate report addressing this mandate.
[13] The Navy plans to meet the threshold performance levels defined
in this document for the ASW mission package in the first and only
increment of that package.
[14] Department of Defense Instruction 5000.02, Operation of the
Defense Acquisition System (Dec. 8, 2008).
[15] We have previously reported on the soundness of the LCS business
case. See GAO, Defense Acquisitions: Realistic Businesses Cases Needed
to Execute Navy Shipbuilding Programs, [hyperlink,
http://www.gao.gov/products/GAO-07-943T] (Washington, D.C.: July 24,
2007) and GAO, Navy's Proposed Dual Award Acquisition Strategy for the
Littoral Combat Ship Program, [hyperlink,
http://www.gao.gov/products/GAO-11-249R] (Washington, D.C.: Dec. 8,
2010).
[16] GAO, Navy's Ability to Overcome Challenges Facing the Littoral
Combat Ship Will Determine Eventual Capabilities, [hyperlink,
http://www.gao.gov/products/GAO-10-523] (Washington, D.C.: Aug. 31,
2010).
[17] The National Defense Authorization Act for Fiscal Year 2006 set a
cost cap of $220 million per ship for the fifth and sixth ships of the
class, with adjustments for inflation. Pub. L. No. 109-163, § 124. The
National Defense Authorization Act for Fiscal Year 2008 set a cost cap
of $460 million per ship for all LCSs procured in fiscal year 2008 and
beyond with no adjustments for inflation. Pub. L. No. 110-181, § 125.
The National Defense Authorization Act for Fiscal Year 2010 further
increased the cap to $480 million per ship. Pub. L. No. 111-84, § 121.
[18] In comparison, the time from program initiation to initial
operational capability for the lead DDG 51 destroyer was approximately
12 years. The DDG 51 is a more complex ship than LCS.
[19] Specific concepts of operations for LCS are articulated in a
classified warfighting CONOPS that describes how the LCS will be
employed as a weapon system, and in an unclassified "platform
wholeness" CONOPS that describes how LCS will be operationally
supported as well as manning and training issues. The Navy has written
two iterations of the warfighting CONOPS (2007 and 2011).
[20] In then-year dollars. The O&S estimate would be $50.4 billion in
2010 dollars.
[21] GAO, Cost Estimating and Assessment Guide: Best Practices for
Developing and Managing Capital Program Costs, [hyperlink,
http://www.gao.gov/products/GAO-09-3SP] (Washington, D.C.: Mar. 2,
2009).
[22] The future years defense program is DOD's 5-year investment plan.
[23] In then-year dollars.
[24] GAO, Littoral Combat Ship: Actions Needed to Improve Operating
Cost Estimates and Mitigate Risks in Implementing New Concepts,
[hyperlink, http://www.gao.gov/products/GAO-10-257] (Washington, D.C.:
Feb. 2, 2010).
[25] Not all of these seaframes have been funded.
[26] GAO, Joint Strike Fighter: DOD Actions Needed to Further Enhance
Restructuring and Address Affordability Risks, [hyperlink,
http://www.gao.gov/products/GAO-12-437] (Washington, D.C.: June 14,
2012)
[27] GAO, Missile Defense: Opportunity Exists to Strengthen
Acquisitions by Reducing Concurrency, [hyperlink,
http://www.gao.gov/products/GAO-12-486] (Washington, D.C.: Apr. 20,
2012)
[28] 10 U.S.C. §§ 2399, 2366.
[29] Low-rate initial production with respect to a new system that is
a weapon systems is production of the system in the minimum quantity
necessary--(1) to provide production-configured or representative
articles for operational tests pursuant to section 2399 of title 10;
(2) to establish an initial production base for the system; and (3) to
permit an orderly increase in the production rate for the system
sufficient to lead to full-rate production upon the successful
completion of operational testing. 10 U.S.C. § 2400(b).
[30] The acquisition program baseline is an important document for
program management that shall include sufficient parameters to
describe the cost estimate, schedule, performance, supportability, and
other relevant factors. The test and evaluation master plan describes
planned developmental, operational, and live-fire testing; measures to
evaluate the performance of the system during these test periods; an
integrated test schedule; and the resources needed to accomplish the
planned testing.
[End of section]
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